Radiant Cash Management submits DRHP for IPO. Check details here

Radiant Cash Management Services Ltd has filed its draft red herring prospectus with the capital markets regulator SEBI to launch its initial public offering, joining dozens of other companies planning to go public.

The IPO comprises a fresh issue of shares worth Rs 60 crore and an offer for sale of a little more than 3 crore shares by its promoter and private equity investor Ascent Capital.

The company’s founder Colonel David Devasahayam intends to sell up to 1.0125 crore shares while Ascent Capital plans to divest 2 crore shares, according to the DRHP.

Devasahayam and co-founder Renuka David together own a 62.79% stake in the company. Ascent Capital holds a 37.21% stake in Radiant Cash.

The company plans to use Rs 20 crore out of the net proceeds from the fresh issue to meet its working capital requirements and Rs 23.92 crore for its capital expenditure. It will use the remaining amount for general corporate purposes.

Radiant’s IPO filing comes about two months after bigger peer CMS Info Systems Ltd, India’s largest cash management company, filed its own DRHP to float an IPO.

Radiant Cash Management’s business

Colonel Devasahayam founded the company in 2005. Radiant Cash is an integrated cash logistics company with a presence in the retail cash management segment of the cash management services industry in India. It says it is one of the largest players in the RCM segment in terms of network locations or touch points served as of July 2021.

It operates five business verticals—cash pick-up and delivery, network currency management, cash processing, cash vans /cash in transit, and other value-added services.

Its clients include some of the largest banks operating in India. These include HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, State Bank of India, and Yes Bank. It also provides services to foreign lenders Citibank, Deutsche Bank, Standard Chartered Bank, and HSBC.

The end users of its services include large e-commerce companies, retail chains, non-banking finance companies, insurance firms, ecommerce logistics players, railways and petroleum distribution outlets.

As of July 2021, it provided services across 12,150 pin codes across India covering all districts except the Lakshadweep islands, with about 42,420 touch points serving more than 4,700 locations.

Radiant Cash Management’s financials

The company reported revenue from operations of Rs 221.67 crore for the year ended March 2021, against Rs 248.28 crore for FY20 and Rs 220.9 crore for FY19. Its profit after tax for FY21 was Rs 32.43 crore, against Rs 36.5 crore for FY20 and Rs 25 crore the year before.

The cash pick-up and delivery vertical accounts for more than half its revenue. The total value of the currency passing through its RCM business amounted to Rs 912.22 billion for FY21, down from Rs 1,290.77 billion in FY20 and Rs 1,131.34 billion the year before.

While the company’s revenue and profit fell last year, it cited a report by Frost & Sullivan to say that in FY20 it had the highest EBITDA margin, Return on Capital Employed and Return on Equity among organised players in the cash management services segment in India.