ALSO READQuess Corp owners to raise Rs 680 cr through share sale Quess Corp falls 8% as share sales by promoters begin; Thomas Cook up 5% Quess Corp Q1 profits up 34% to Rs 33 crore, to raise funds for M&As Quess Corp Q2 net surges over four-fold to Rs 141 cr Motilal Oswal realty arm to invest Rs 1,000 cr in FY18
The Rs 680-crore offer for sale (OFS) by Quess Corp saw five times more demand the shares on offer. Promoters Thomas Cook and Ajit Abraham Isaac offloaded about six per cent stake in the company through the OFS to comply with the 25 per cent minimum public shareholding norms. The base price for the 8.5-million share sale was fixed at Rs 800 apiece, however, most bids came at Rs 837.
Shares of Quess ended at Rs 857, down 6.2 per cent in secondary market trading on the BSE. About 850,000 shares reserved for retail investors will be auctioned on Friday. Following the share sale the promoter holding in the company will drop from 81.52 per cent to 75.38 per cent. Axis Capital Limited and India Infoline acted as investment bankers for the deal. Quess Corp is a technology solutions and manpower staffing company and currently has market capitalistion of Rs 11,855 crore.
Motilal Oswal has a buy rating on the stock with a price target of Rs 1,170 crore. "Valuations are rich, given its strong growth history and continued aggressive thrust on acquisitions.
Over FY17-20E, we expect revenue/Ebidta/net profit CAGR of 31%/42%/62%, led by our assumption of 20 per cent growth in organic business and incremental contribution by recent acquisitions. Long-term prospects stand bright, given high-growth opportunities, aggression shown on expansion and flawless execution," said a note by the brokerage.