Why is the Security and Intelligence Services (India)Ltd. IPO creating buzz?

Objects of the issue

a) Offer for sale by selling shareholders: An offer for sale of up to 51,20,619 shares by the existing shareholders. b) Fresh issue proceeds to be used to prepay debt c) General corporate purposes

It’s interesting to note that Security and Intelligence Services (India) Limited (“SIS”) is going to be the only listed company in this space. Quick facts about the company:

Security Services:

SIS is the 2nd largest Security Services provider in India, in terms of revenue, as of March 31, 2016, and the fastest growing Security Services provider in India, based on revenues for Fiscal Years 2010 to 2014, according to Frost & Sullivan. In addition, Freedonia ranks company’s wholly-owned Subsidiary, MSS Security Pty Limited (“MSS”) as the largest security services provider in Australia, jointly with a competitor, in terms of revenues, as of March 31, 2015. SIS provide a comprehensive range of security services ranging from providing trained security personnel for general guarding to specialized security roles in India and Australia. In Australia, they also provide paramedic and allied health, mobile patrol and fire rescue services.

Cash Logistics Services:

SIS is the 2nd largest Cash Logistics Service provider in India, in terms of market share by revenue, number of employees, ATMs served and cash vans utilized, as of March 31, 2015, according to Frost & Sullivan. The cash logistics business in India includes services such as cash in transit including transportation of bank notes and other valuables, doorstep banking as well as cash processing, ATM related services including ATM replenishment, first line maintenance and safekeeping, and vault related services for bullion and cash.

 Electronic Security Services and Home Alarm Monitoring and Response Services:

In India, SIS provide Electronic Security Services, including integrated and turnkey electronic security and surveillance solutions combining electronic security with trained manpower and have recently entered into a joint venture in order to provide home alarm monitoring and response services;

Facility Management Services:

The Facility Management Services in India include cleaning, janitorial services, disaster restoration and clean-up of damage, as well as facility operation and management such as deployment of receptionists, lift operators, electricians and plumbers, and also pest and termite control. Effective August 1, 2016, SIS acquired 78.72% of the outstanding equity shares of Dusters Total Solutions Services Pvt. Ltd. (“Dusters”), with the agreement to increase their shareholding to 100% over the next 3 years. Dusters is the 4th largest Facility Management Services provider in India, in terms of revenues, as of March 31, 2016, according to Frost & Sullivan

Between Fiscal Years 2013 and 2017, their revenue from operations from the security services business in India grew at a CAGR of 29.67%.

SIS has established a nation-wide network in India, comprising of 80 branches, including shared branches, 2,748 cash routes, served by 2,518 cash vans as well as two wheeler vehicles and 59 vaults and strong rooms, as of April 30, 2017, and have set up a secure cash processing unit at New Delhi, to service their customers’ needs.

SIS (India) Ltd has reported a CAGR of 14.6% and 12.4% on the sales and net profit fronts respectively over FY2013-2016.

In Australia, SIS operates in each of the 8 states and employed 5,754 personnel servicing 245 customers. Freedonia ranks their wholly-owned Subsidiary, MSS, as the largest security services provider in Australia, jointly with a competitor, in terms of revenues, as of March 31, 2015. SIS entered this business in Australia by acquiring Chubb Security’s security services business in August 2008. Between Fiscal Years 2013 and 2017, their revenue from operations from their security services business in Australia grew at a CAGR of 7.7% in Australian Dollar terms.

Ravindra Kishore Sinha is the Chairman-cum-Managing Director of the company. He has been associated with the company since incorporation. He has over 30 years of experience in the business of the company. At present, he is a Member of Parliament (Rajya Sabha) from Bihar. He has also served as an advisor to the Ministry of Human Resource Development, Government of India. Rituraj

Kishore Sinha is the Managing Director of the company. He has over 14 years of experience in the company.

Uday Singh is the Group CEO and Whole-time Director of the company. He has over 38 years of experience in management and has, in the past, held various positions with Metallurgical & Engineering Consultants (India) Limited as Engineering Manager, with Jindal Vijaynagar Steel Ltd as Deputy Manager (System Integration and Quality) and with Praxair Carbon Dioxide Private Limited as Director and Business Head. management service provider in India, in terms of revenues, as of March 31, 2015, according to Frost & Sullivan.

SIS has also entered into a joint venture with Terminix, a multinational provider of termite and pest control services.

 

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