AGS Transact to set up 5,000 ATMs

AGS Transact Technologies Ltd (ATTL), an ATM outsourcing and systems integration company, plans to set up 5,000 ATMs in the next 18 months and double headcount to 2,600 by March 2013 to support its expansion plans.

The company is setting up about 300 units every month. The capital expenditure for expanding the ATM network is pegged at Rs 450-500 crore. Managing Director Ravi Goyal said the expenditure would be funded through equity, debt finance and vendor financing.

AGS has installed over 11,000 ATMs for over 70 banks in India. The current installed base of 75,000 ATMs is expected to more than double reaching 175,000 machines by 2015.

In June, private equity group TPG invested about Rs 145 crore ($32 million) in the company. The proceeds will be used to fund ATM outsourcing rollouts. TPG will hold about 20 per cent in the company.

In September 2010, ATTL had planned an initial public offering to raise equity funds from the capital market. But with rough market conditions, it deferred the plan.

Though funding arrangements are in place, the company does not plan to hit the market immediately. It might do so after three or four years to provide an exit route for private equity investors, said another company executive.

The AGS group offers technology-based solutions for four segments. First is banking, which includes managing ATMs for banks, cash deposit and re-cycling machines. It has a technical tie-up Wincor- Nixdorf AG of Germany.

The second line of business is retail, which involves setting up and managing point-of-sale billing terminals and store automation peripherals. The third is petroleum, which focuses on retail outlet automation, including automatic tank gauging systems and fuel dispenser interface. The fourth is the total colour solution division which deals with manufacturing and distributing paint dispenses as well as rotary screen engraves.

The banking division accounts for the maximum share of the group’s turnover pie.

The group’s turnover has grown from Rs 146.56 crore in 2006-07 to about Rs 305 crore in year ended March 2011. The net profit in FY07 was Rs 7.74 crore but dipped to Rs 6 crore at the end of 2010-11.

The company’s profit after tax for 2011 declined over the previous financial year, as it had to spend an additional amount as depreciation for expanding the ATM network, Goyal said.

Referring to human resource plans, he said being service company, the businesses are human resource intensive. At present headcount was about 1,300. It would double to over 2,600 in 2013.