NSB BPO BSE SME IPO review

•    The company is engaged in providing BPO services specializing in area support services solutions in domestic markets.
•    The company posted inconsistency in its top lines for the reported periods.
•    Its growing bottom lines for the last three fiscals has surprised one and all.
•    Based on its recent financial data, the IPO appears greedily priced.
•    Only well-informed/risk savvy/cash surplus investors may park moderate funds for medium term, in this “High Risk/Low Return” bet.

ABOUT COMPANY:
NSB BPO Solutions Ltd. (NBSL) is engaged in the business of providing Business Process Outsourcing (BPO) services specializing in the area of support services solutions. It provides wide ranges of support services such as Customer Care and Customer help line Call Centre for clients, Tele-sales, Tele collections, Digitization of documents, Processing of application and KYC forms, warehousing and archival, Payroll management, etc. It focuses on providing efficient and accurate services which is core value of the organization. With a team of skilled professionals, it offers a diverse range of services to support various aspects of clients' business operations for an ultimate end to end business solutions for need of the client business.

The company to achieve the delivery standards and providing the quality solutions using the latest technology like Artificial Intelligence, Speech Analytics, Data Analytics and such other technological tools, the company offers its services to its clients, with a team of trained professionals, so that all the delivery parameters and agreed terms of Service Level Agreement are met to the satisfaction of the client. The Company provide continuous learning and development for its employees to ensure they possess the necessary knowledge to meet evolving client demands. Regular training sessions and upskilling programs equip its staff with the latest industry trends and best practices, enabling them to deliver superior services. 

The Company has been also taking various quality standards certifications to continuously improving on quality standards as disclosed under Government Approvals section. The Company believes that constant investment in Infrastructure and Technology is very important and required for achieving higher levels of service excellence. It will continue to invest in the upgradation and modernization of infrastructure and technology and also take the services of consultants, if required, to adopt latest technology.

In today’s business world, starts ups to mid-size companies to large corporate are focusing on outsourcing model for their various activities. The Company provides services to Start ups to mid-size and large corporates to fulfil their business outsourcing needs. The Company provide services in various industries namely Telecom. BFSI, E Retail, Insurance, Food Delivery, Hotels, State and Central Government Organisations, HealthCare, Education, etc.

The company currently operates solely within the boundaries of India and does not have any business activities, subsidiaries, or operations in foreign countries. The company's focus remains on its domestic operations, ensuring efficient service delivery and customer satisfaction within the Indian market. The company maintains well-defined and established business agreements with all of its clients. These agreements outline the terms, scope, and responsibilities of both the company and its clients, ensuring clear expectations and a harmonious working relationship. As of August 31, 2025, it had 2439 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 5300000 equity shares to mobilize Rs. 77.91 cr. at the upper cap. It has announced a price band of Rs. 140 – Rs. 147 per share of Rs. 10 each.  The IPO opens for subscription on September 23, 2025, and will close on September 25, 2025. The minimum application to be made is for 2000 shares and in multiple of 1000 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 26.54% of post-IPO paid-up equity capital of the company. The company is spending Rs. 4.25 cr. for this IPO process, and from the net proceeds of the issue, the company will utilize Rs. 29.02 cr. for working capital, Rs. 13.38 cr. for capex on new project, Rs. 25.82 cr. for repayment of certain borrowings, and the rest for general corporate purpose.

After reserving 5.00% for Market Maker, the company has allocated 1.05% for QIBs, 49.65% for Retail Investors, and 49.29% for HNIs.

The IPO is solely lead managed by Inventure Merchant Banker Services Pvt. Ltd., while Bigshare Services Pvt. Ltd. is the registrar to the issue. Alacrity Securities Ltd. is the market maker, as well as a syndicate member. The IPO is underwritten to the tune of 15% by Inventure Merchant Banker and 85% by Alacrity Securities Ltd.

The company has issued initial equity shares at par, and issued further equity shares in the price range of Rs. 69.27 – Rs. 6337.80 per share between March 2008, and February 2025. It has also issued bonus shares in the ratio of 6 for 1 in January 2024. The average cost of acquisition of shares by the promoters is Rs. 15.95 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 14.67 cr. will stand enhanced to Rs. 19.97 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 293.60 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue/net profit, of Rs. 285.15 cr. / Rs. 2.21 cr. (FY23), Rs. 128.27 cr. / Rs. 4.78 cr. (FY24), Rs. 138.54 cr. / Rs. 8.54 cr. (FY25). Its top and bottom lines marked inconsistency indicating uncertainties and raising major concern. Its mounting Trade Receivables raises alarm.

For the last three fiscals, the company has reported an average EPS of Rs. 6.08, and an average RoNW of 6.37%. The issue is priced at a P/BV of 1.55 based on its NAV of Rs. 95.09 as of March 31, 2025, and at a P/BV of 1.35 based on its post-IPO NAV of Rs. 108.87 per share (at the upper cap)

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 34.43, and based on its FY24 earnings, the P/E stands at 61.51. Thus, the issue appears greedily priced.

The company has posted PAT margins of 0.77% (FY23), 5.25% (FY24), 7.98% (FY25), and RoCE Margins of 1.31%, 5.04%, 9.42%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown eClerx Services, Firstsource Solutions, and One Point One, as its listed peers. They are currently trading at a P/E of 36.6, 42.7, and 34.8 (As of September 19, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORDS:
This is the 11th mandate from Inventure Merchant Banker in the last four fiscals (including the ongoing one). Out of the last 9 listings, two opened at discount, 1 at par and the rest with premium ranging from 1.08% to 90.00% on the date listing.