Radiant Cash Management Services lists at 10% premium over issue price

Shares of Radiant Cash Management Services had a good debut on Dalal Street today. The stock opened at Rs 103, up 9.57 percent from its issue price of Rs 94 per share on the NSE. It opened at Rs 99.30 on the BSE, up 5.6 percent.

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The listing managed to buck analysts' expectations. Due to low grey market premium, lower-than-expected response to its IPO and ongoing market volatility, the stock was expected to make a flat debut.

The issue was subscribed just 53 percent during December 23-27, but the IPO sailed through after the company significantly reduced its offer-for-sale component.

The total offer size was reduced to Rs 250.76 crore, comprising fresh issuance of shares worth Rs 51.27 crore and an OFS of Rs 199.5 crore. Earlier, the IPO size was Rs 388 crore, consisting of fresh issue of Rs 60 crore and an offer-for-sale of Rs 328 crore by promoter and investor.

Also, the final issue price has been fixed at lower end of price band of Rs 94-99 per share, but its anchor book was subscribed at upper price band.

Incorporated in 2005, Radiant Cash Management Services provides retail cash management services for banks, financial institutions, and organized retail and e-commerce companies in India.

Its key clients are ICICI Bank, HDFC Bank, Citibank, Kotak Mahindra Bank, Yes Bank, Standard Chartered Bank, Deutsche Bank, State Bank of India, Axis Bank, and The Hongkong and Shanghai Banking Corporation Limited.

Manish Chowdhury, Head of Research at Stoxbox, who had given an 'avoid' rating to the IPO due to rich valuation vis-à-vis its peer group (SIS and CMS Info Systems) and limited competitive advantage in the marketplace, feels that investors who got allotment should look for better opportunities in the market.

Mohit Nigam, Fund Manager and Head of PMS at Hem Securities, believes investors should make an informed judgement about the company and its future prospects.