HRH Next Services LTD IPO -Review, Valuation, Date & GMP

HRH Next Services Limited IPO  - Complete Overview

Established in February 2007, HRH Next Services Limited is a business process outsourcing provider offering diverse services, including chat, voice, and email support. The company caters to clients in various sectors such as telecom, food-tech, autotech, e-commerce, fintech, education, healthcare, government, and banking.

Generally known as HRH (Hyderabad Radio House), the company has evolved over the years, initially excelling in the electronics industry. In 2002, it transitioned to the telecommunications sector, gaining recognition as an award-winning partner. By 2007, HRHNext emerged, focusing on revolutionizing customer service in the domestic call center industry. In 2021, the company shifted its focus to providing comprehensive contact centre solutions to prominent companies across multiple industries.

With a current workforce of 1800 employees spread across six locations, HRH Next specializes in inbound and outbound voice processes, including customer issue resolution, outbound sales, and various support services. The company is ISO 9001:2015 certified for quality management services and ISO/IEC 27001:2022 certified for information security management.

 

HRH Next Services Limited IPO Overview

HRH Next Services Limited IPO date is slated to be open for subscription from December 27, 2023, to December 29, 2023. This NSE SME IPO follows a Fixed Price Issue IPO.

HRH Next Services Limited IPO  price is fixed at Rs.36 per share. The upcoming NSE SME IPO will be listed on January 3, 2023.

The total issue size of this IPO amounts to Rs.9.57 CR. The company has reserved 50% for retail investors and 50% for other investors. 

 

 

HRH Next Services Limited IPO timetable (Tentative)

Events	Date
IPO Opening Date	27 December 2023
IPO Closing Date	29 December 2023
IPO Allotment Date	1 January 2023
Refund initiation	2 January 2024
IPO Listing Date	3 January 2024

HRH Next Services Limited IPO Details

IPO Opening & Closing Date	27 December to 29 December 2023
Face value	Rs. 10 per Share
Issue Price	Rs. 36 per Share
Lot Size	3000 Shares
Price of 1 lot	Rs.1,08,000
Total Issue Size	2,658,000 Shares (aggregating up to Rs. 9.57 Cr)
Fresh issue	2,658,000 Shares (aggregating up to Rs. 9.57 Cr)
Listing at	NSE SME
Issue Type	Fixed Price Issue IPO
Registrar	Cameo Corporate Services Limited

 

 

HRH Next Services Limited IPO Lot Details

Application	Lot	Shares
Minimum Lot Investment (Retail)	1 lot	3,000
Maximum Lot Investment (Retail)	1 lot	3,000
Minimum Lot Investment (HNI)	2 lot	6,000

 

HRH Next Services Limited IPO Reservation

Retail Shares Offered	50%
Other Shares Offered	50%

 

Company Financial

As of September 30, FY 23,the company reports healthy total assets, net worth, and total revenue, indicating strong financial standing.

(Amount in Lakhs)

Period	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Total Assets	3,113.86	2,882.29	1,864.85
Total Revenue	2,152.51	5,124.96	4,428.42
PAT	150.84	347.79	93.03
Net worth	1,320.71	1,044.79	697.00
Reserve & Surplus	665.96	1,024.79	677.00
Total Borrowings	1,083.77	990.57	442.58

 

Service-wise break up Revenue Distribution

The company generates revenue from different services like Outbound Sales, Backend Support, Inbound Services, Chat Support, and Email Support.   

(Amount in Lakhs)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Outbound Services	1,400.28	3,583.51	2,858.14
Outbound – Sales	273.74	520.57	467.87
Backend Support	219.18	318.36	372.48
Inbound Services	128.75	317.39	354.82
Chat Support	41.24	192.84	132.05
Email Support	75.97	180.96	229.88
Total	2,139.16	5,113.63	4,415.23

Call Centre-wise Breakup Revenue Distribution

HRH Next Services Limited's revenue is primarily driven by Telangana, followed by contributions from Tamil Nadu and Karnataka.

( Amount in Lakhs)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Telangana	1,668.37	3,610.81	3,408.83
Tamil Nadu	327.90	1,082.10	900.61
Karnataka	142.89	420.72	105.79
Total	2,139.16	5,113.63	4,415.23

 

Revenue by Operations

They rely heavily on core operations, constituting 99.78% of revenue in FY23, while other income makes up a minor share at 0.22%.

 (amount in %)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Revenue from operations	99.38%	99.78%	99.70%
Other Operating Income	0.62%	0.22%	0.30%
Total Revenue from operations	100.00	100.00	100.00

 

The Objective of the Issue

The company intends to use the net proceeds for the following objectives.

• Expansion of the Services by launching 2 (two) Call Centres.

• Capital Expenditure towards purchase of Computer Systems.

• To meet the working capital requirements.

• To meet the Issue Expenses.

• General Corporate Purposes.

 

Promoters and Management of HRH Next Services Limited IPO

1. Mr Ankit Sanjay Shah.

2. Mr Parikshit Pankaj Shah.

3. Mrs Tara Sanjay Shah.

Pre-issue Promoter Shareholding	97.88%
Post-issue Promoter Shareholding	69.61%

HRH Next Services Limited IPO Lead Managers

• Finshore Management Services Limited 

 

Peers of HRH Next Services Limited IPO

The company stands out among peers with a lower face value and favorable P/E ratio. 

Name of the Company	Face value (Rs. per share)	P/ E	EPS (Basic) (Rs.)
HRH Next Services Limited	10	6.42	5.61
Platinumone Business Services Limited	10	15.62	14.53
Kandarp Digi Smart BPO Limited	10	12.06	1.41
We Win Limited	10	15.18	2.57

 

Evaluation

The IPO is priced within the range of Rs. 36 per share.

 

Evaluation of P/E Ratio

- Considering the FY23 EPS of Rs 5.61 from the last year, the resulting P/E ratio is 6.42x.

- Taking into account the weighted EPS of Rs .37 for the last three years, the P/E ratio amounts to 10.68x.

Comparative Analysis with Listed Peers

- Platinumone Business Services Limited has a P/E ratio of 15.62x (the highest).

- Kandarp Digi Smart BPO Limited has a P/E ratio of 12.06x (the lowest).

- The industry's average P/E is 13.84x.

 

Consequently, the IPO Price range at a P/E of 6.42x to 10.68x is considered slightly undervalued if we compare it to the industry average.

 

Dividend Policy

The company hasn't paid dividends in past fiscal years. Whether we can pay them in the future depends on factors like profits, past dividend trends, capital needs, legal restrictions, and other relevant considerations evaluated by our Board.

 

IPO's Strengths

• Quality Services.
• Cordial Relationship with Customers.
• Ability to control cost.
• Strong Network in existing business.

IPO's Weaknesses

• Strict policies of clients and Audit controls may pose a real hurdle.
• Low bargaining power with customers.
• Growing competition from both local and major industry players.
• Change in Government Policy.

 

IPO GMP Today

The Last GMP for HRH Next Services IPO was Rs.9

 

Conclusion

In conclusion, HRH Next Services Limited, with its strong presence in the business process outsourcing sector, emerges as an attractive investment opportunity. The IPO, set to open from December 27 to December 29, 2023, at a fixed price of Rs.36 per share, aims to raise capital for strategic purposes, including expanding its service offerings, addressing working capital needs, covering issue expenses, and supporting general corporate activities.

The company's strong financial standing, diverse service portfolio, and ISO certifications for quality management and information security management enhance its credibility. The IPO's listing date on January 3, 2024, marks a significant milestone for potential investors looking to participate in HRH Next Services Limited's growth journey.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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