Seshaasai Techno IPO review

•    The company is most preferred partner for multi-location solutions for BFSI industry.
•    It has many first to its credit on new technology and fulfilment solutions.
•    The company marked constant growth in its bottom lines for the reported periods.
•    It marked a bit fall in its top line for FY25 on account of card business marking lower activities.
•    Investors may park funds for medium to long term.

ABOUT COMPANY:
Seshaasai Technologies Ltd. (STL) is a technology driven multi-location solutions provider focused on offering payments solutions, and communications and fulfilment solutions catering primarily to the banking, financial services and insurance (“BFSI”) industry, with data security, and compliance at the core of solutions. Solutions, that it offers at scale and on a recurring basis driven by proprietary platforms, play a crucial role in enabling the operations and deliverables of the BFSI sector in India. (Source: F&S Report) STL also offers Internet of Things (“IoT”) solutions to a diverse set of customers
across industries.

It is one of the top two payments card manufacturers in India with a market share of 31.9% in Fiscal 2025 for credit and debit cards issuance in India improving from 25.0% in Fiscal 2023. (Source: F&S Report) It is one of the largest manufacturers of cheque leaves in India. (Source: F&S Report) Its business verticals comprise Payment Solutions, Communication, Fulfilment Solutions and IoT solutions.

The company offers a range of payment enabling instruments on Indian and well recognized global payment schemes such as, debit cards, credit cards, pre-paid cards, mass transit cards and cheques. As part of its offerings, STL designs and develops these instruments and securely embed customer data onto them and send to end customers, either individually or packaged into specialized kits. STL’s patented QR technology helps enhance security of instruments manufactured by it. In Fiscal 2025, 2024 and 2023, the company supplied 91.37 million, 110.33 million and 76.18 million payment cards, respectively and 1,188.81 million, 1,193.78 million and 1,273.80 million cheque leaves, respectively, in referred periods. 

The company also develops merchant QR codes that enable digital payment transition onto the Unified Payment Interface (“UPI”) at the point of sale. It has recently also incorporated near field communication (“NFC”) technology on merchant QR codes to enable tap and pay. It also provides payment-on-the-go or non-card form factors such as wearables, key fobs, wristbands and stickers. It introduced ‘Made in India’ metal and biometric cards that were approved by global payment schemes. It is the first company to introduce different form factors for payments under the RuPay brand, marking the introduction of a whole new category, i.e., RuPay On-the-Go wearables.

Seven of its units have been approved by the Indian Banks Association for secure printing (cheques, demand draft, and pay orders), and three of its units are certified by global schemes for card personalization. STL is among the only two vendors in India with empaneled units for both cards and cheques at more than two locations. (Source: F&S Report) As of June 30, 2025, it had 862 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO of equity shares worth Rs. 813.07 cr. (approx. 19221533 equity shares at the upper cap). The IPO comprises of fresh equity shares worth Rs. 480 cr. (approx. 11347518 equity shares at the upper cap), and Offer for Sale (OFS) of 7874015 equity shares (worth Rs. 333.07 cr. at the upper cap). The company has announced a price band of Rs. 402– Rs. 423 per equity shares of Rs 10 each. The issue opens for subscription on September 23, 2025, and will close on September 25, 2025. The minimum application to be made is for 35 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. The issue constitutes 11.88% of the post-IPO paid-up equity capital. From the net proceeds of the IPO funds, it will utilize Rs. 197.91 cr. for capex on expansion of existing unit, Rs. 230.00 cr. for repayment/prepayment of certain borrowings, and the rest for general corporate purposes.

The company has reserved equity shares worth Rs. 2 cr. for its eligible employees and offering them a discount of Rs. 40 per share. From the rest, it has allocated not more than 50% for QIBs, not less than 15% for HNIs, and not less than 35% for Retail investors. 

The joint Book Running Lead Managers (BRLMs) to this issue are IIFL Capital Services Ltd., and SBI Capital Markets Ltd., while MUFG Intime India Pvt. Ltd., is the registrar to the issue. SBICAP Securities Ltd., and Investec Capital Services Ltd. are syndicate members.

Having issued initial equity shares at par, the company issued further equity shares in the price range of Rs. 19.20 – Rs. 423.00 per share (based on Re. 2 FV), between December 2008, and August 2025. It has also issued bonus shares in the ratio of 1 for 1 in March 2003, 1.24 for 1 in August 2008, 45.44 for 1 in March 2023. The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. 7.72 per share. 

Post-IPO, its current paid-up equity capital of Rs. 150.45 cr. will stand enhanced to Rs. 161.80 cr. Based on the upper cap of the IPO price band, the company is looking for a market cap of Rs. 6844.18 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit, of Rs. 1153.84 cr. / Rs. 108.10 cr. (FY23), Rs. 1569.67 cr. / Rs. 169.28 cr. (FY24), and Rs. 1473.62 cr. / Rs. 222.32 cr. (FY25). While it posted degrowth in its top line for FY25 compared to FY24, it posted rising bottom lines for the reported periods.

According to the management, the company enjoys niche place in the segment with user friendly solutions that it provides for BFSI segment. With the ongoing trends management is confident of maintaining its financial performance in coming years with the trends indicated by the last three fiscals.

For the last three fiscals, the company has posted an average EPS of Rs. 15.74 (basic) and an average RoNW of 34.32%. The issue is priced at a P/BV of 9.32 based on its NAV of Rs. 45.37 as of March 31, 2025, and at a P/BV of 5.39 based on its post-IPO NAV of Rs. 78.47 per share (at the upper cap).

If we attribute FY25 earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 30.79. Based on FY24 earnings, the P/E stands at 40.44. Thus, the issue appears fully priced. 

The company has shown PAT margins of 9.37% (FY23), 10.78% (FY24), 15.09% (FY25), and RoCE margins of 28.65%, 33.47%, 31.87%, respectively for the referred periods.

DIVIDEND POLICY:
The company has paid dividends for FY23 (8.44%), FY24 (6.10%), and FY25 (11.52%). It has already adopted a dividend policy in December2024, based on its financial performance and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has no listed peers, to compare with. 

MERCHANT BANKER’S TRACK RECORD:
The three BRLMs associated with the offer have handled 94 pubic issues in the past three fiscals, out of which 22 issues closed below the offer price on the listing date.