Radiant Cash Management Services files draft documents to raise funds via IPO

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Radiant Cash Management Services Ltd has filed a draft red herring prospectus with the Securities and Exchange Board of India to raise funds via an initial public offering.

The initial public offering consists of a new issue of shares worth ??60 crore and an offer to sell up to 30.13 million shares by its promoters and existing shareholders.

The OFS includes the issuance of up to 10.13 million shares by Colonel David Devasahayam and up to 20 million shares by Ascent Capital Advisors India. Currently, Devasahayam owns a 54.40% stake in the company while Ascent Capital holds a 37.221% stake in the company.

The proceeds of the issue are worth ??20 crore will be used to finance working capital requirements. In August 2021, the outstanding working capital in funds and non-funds was ??21.42 crores and ??21.02 crores respectively.

The company manages a cash volume of approximately ??400 crore per day, which sometimes goes up to around ??1000 crore during long weekends. The increase in its working capital will allow it to increase its capacity to manage higher daily cash volumes.

The company also plans to use ??23.92 crore for the purchase of 220 specially manufactured armored vans. As of July 2021, it was using a fleet of 694 manufactured armored vans.

IIFL Securities, Motilal Oswal and Yes Securities are the main managers of the issue.

The company is an integrated treasury logistics player present in the Retail Cash Management (RCM) segment of the Cash Management Services industry in India and is one of the largest players in the RCM segment in terms of ‘network locations or contact points served as of July 31.

The company provides services through 12,150 PIN codes in India covering all districts (other than Lakshadweep) with around 42,420 contact points serving over 4,700 locations as of July 31.

For the four months ended July 2021 and Fiscal Year 2021, its total annual currency movement or the total value of currency passing through its RCM transaction was ??368.39 billion and ??1.29 trillion respectively.

For fiscal year 2021, its operating revenue amounted to ??221.67 crore against ??248,298 crores a year ago. The net result for the period amounts to ??32.43 crores against ??36.50 crore last year. In August, its total borrowings amounted to ??23.22 crores.

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