BVG India IPO: Everything you need to know

Introduction

Pune-based Bharat Vikas Group, popularly known as BVK, which is backed by UK equity major 3i Group, has filed a draft red herring prospectus (DRHP) with the Securities Exchange Board of India (SEBI) for an initial public offering (IPO). Here’s all you need to know about the IPO.

IPO Details

• IPO name: BVG India Limited
• IPO size: Not Mentioned

Issue Highlights

• Fresh issue: ₹200 crore
• Offer for sale: 7,196,214 equity shares
• Price band: Not announced
• Lot size: Not announced
• Face Value: ₹10
• Minimum Price: Not announced
• Maximum Price: Not announced
• Allocation to QIB: Not announced

IPO Timeline

• Start Date: Not announced 
• End Date: Not announced
• Tentative allotment date: Not announced
• Tentative refund credit: Not announced
• Listing date: Not announced

Registrar Information

• Registrar Name: Link Intime India Private Limited
• Concerned Person Name: Rajni Ramchand Pamnani, Company Secretary and Compliance Officer
• Email: ipocs@bvgindia.com
• Contact Number: +91-20-3509 0000

Key highlights

• Fresh Issue of equity shares aggregating to ₹200 crore
• Offer for sale of up to 7,196,214 equity shares
• Offer for sale comprises shares selling shareholders including Hanmantrao Ramdas Gaikwad and Umesh Gautam Mane
• Shares will be listed on BSE (Bombay Stock Exchange) and NSE (National Stock Exchange)
• The lead managers of the stock issue are ICICI Securities, JM Financial, and HSBC

Reasons for going public

BVG India expects aims to use the proceeds from the public issue for:

• Repayment of certain borrowings of the company 
• General corporate purposes including strategic initiatives, funding growth opportunities, strengthening marketing capabilities and brand building, etc.

Company fundamentals

Top shareholders of the company

Company Financials

Here’s a look at the company’s financial status:

Company Overview

BVG Group is an integrated services enterprise headquartered in Pune, Maharashtra. It creates, maintains, and sustains facility management, emergency medical services, alternate energy production, rural upliftment and provides support services for companies, institutes, and establishments. The company’s mission is to provide learning, employment, and growth opportunities to the untapped workforce in India.

Industry outlook

The facility management sector is slowly gaining popularity and contributing towards India’s GDP. According to the DRHP filed by BVG India Limited, the facility management market in India is estimated to grow at a CAGR of 15% between financial years 2021 and 2023. Majority of the growth is expected to be driven by the consistent growth in demand from the commercial, retail, and industrial sectors.

Competitive strengths

BVG India has managed to set itself apart in the following ways:

• Provides a comprehensive range of integrated services across multiple sectors 
• Offers specialized services for auto ancillary, including paint shop maintenance services
• Offers specialized services to hospitals including mechanized housekeeping, patient care, security services, staffing of ward attendants and nurses and emergency medical response services
• Has a strong presence in the education sector 
• Has ability to provide a wide range of services to clients under a single contract 
• Has a strong operational and financial track record 

Opportunities

• Adopting a sector-wise focus to develop business
• Leveraging expertise in specialized services
• Cross-selling integrated services
• Implementing measures to facilitate and reallocate resources according to project requirements
• Initiating increased digitization across services

Threats

• The health and economic implications of the pandemic may have an impact on business operations and financial performance
• Failure to comply with labour legislations may adversely impact operations and lead to loss of reputation 
• Inability to trace company records for certain allotments of securities
• Negligence to protect intellectual property rights 
• No assurance that the government will place emphasis on integrated services, emergency responses, and waste management services

Risks

• Inability to meet expected service standards within agreed timelines
• Pricing is dependent on limited internal data, which could prove to be inaccurate
• Inability to grow consistently and successfully implement strategies
• No assurance that clients who contribute significantly to the revenue will renew agreements
• Failure to meet emerging technological trends
• Outstanding legal proceedings against the company

While the Make in India campaign is playing an important role in the country’s economic development, the success of any business is highly dependent on brand image, state-of-the-art equipment, and skilled workforce.