TeamLease Services Ltd IPO Message Board (Page 36)

Nayakbhai what about TeamLease ?? Precision ko jane do yaar now

Allotment DATA comes for Institute ? any one confirmed ? septa, eagleye ???

The issue with TL is not low profit margin, per se. The problem is that its prospects for both Sales growth as well as Margin improvement are constrained by practically no barriers of entry. Small new players would mushroom and crowd the lower segment whereas established big players will create intense competition in the value added segment.

There is no doubt TL will grow fast. The question is, "will it grow its earnings @65% for a sustained period ( at least 5 years) so as to induce us to buy?"

There are so many negative voices about Teamlease...as i feel there is another view we can look upon...and fundamentally it will be a good investment....i will try to explain my viewpoint with my little knowledge as i am new to stock market...

no doubt that team lease is very well run company the issue is asking price is very steep.... the promoters r asking all the premium for a price which future hangs out with wafer thin margin.....so those good things u have mention is useless if the price i am getting is high..... anyway PE of 50 plus is a very risky factor hardly any issue above 30 PE have been successful IPO list even if it had the run is not long

Septa sir, thanx 4 ur valuble words....

As per Economic Times sites

Quick Heal issue will open on 08.02.2016

IPO NAME      ISSUE TYPE      OFFER RANGE      OPENING DATE      CLOSING DATE      ISSUE SIZE
Quick Heal Technologies Ltd.      OFS      311-321      08/02/2016      10/02/2016      156.19 Cr

Hi,
The Capital Market rating to PCL was 42 and the Rating of TeamLease is at poor 35. Then how come the GMP of PCL is at Zero and TeamLease at 200+. Can anyone explain ??

Valuation
On valuation front at the price band of Rs 785-850, the issue is available in the Price to Earnings (PE) of 55.53x – 60.07x after the annualised earning of H1FY16 and on fully diluted equity share capital. Although there are no listed comparable players, PE of 60 looks stretched especially looking at such lower margins. Even if we consider from market cap to sales perspective, the company is asking more than six times, again on higher side. Therefore, we advise our readers to stay away from the issue. - See more at: http://www.dsij.in/article-details/articleid/13255/teamlease-ipo-analysis.aspx#sthash.TtJQIG2t.dpuf

Also I think the 10% reservation for RII (small issue size) will result in less chances for allotment in case of oversubscription

But CRISIL has given 4/5 rating.

The Manufacturing PMI in China came in at 48.4 in January of 2016 from 48.2 in December 2015 and beating market expectations. Despite rising, the index has been in a contraction since March 2015. Production fell for the second successive month in January. Though modest, the rate of contraction was the fastest seen in four months. Employment also contracted at a faster pace. Meanwhile, new orders declined at softest pace in seven months. Weaker client demand led manufacturers to discount their prices charged again extending the current sequence of deflation to 18 months. Manufacturing PMI in China averaged 49.38 from 2011 until 2016, reaching an all time high of 52.30 in January of 2013 and a record low of 47.20 in September of 2015.

The company is a leading player in the flexi (temporary) staffing industry, with over one lakh job-seekers or associate employees on board.

Growing number of enterprises transitioning to formal employment can increase the share of flexi staffing in the overall workforce, which holds significant potential for TeamLease.

But the asking price for the issue, which is on the high side, is a dampener.

Given that the company has turned profitable at the operating level only two years back (in 2013-14), the one-odd per cent operating margin, does not offer valuation comfort.

Investors can skip the offer. The consistency in earnings and scope for improvement in margins need to be watched in the coming quarters.

Volume matters
The growth in revenue has been a function of volume — number of flexi-employees and realisation. The number of flexi-employees has grown 17 per cent annually between 2010-11 and 2014-15.

These employees are on-boarded to TeamLease and deputed to the client’s location. Since they are on the payrolls of TeamLease, the company does the necessary statutory requirements such as contribution to Employees’ Provident Fund. The revenue for the company thus includes salaries due to the employees. Wage inflation hence impacts realisations, which also drives revenue growth.

TeamLease charges a service fee from its clients. Currently 72 per cent of its client base is charged a fixed service fee while 28 per cent pay a certain per cent of the employees’ salary. On an average, the company’s service fee works out to Rs 650 per month per employee.

Since the majority of associate employees are first timers to the job market, the average wage is about Rs 15,000. Hence, the business is primarily volume-driven.

Of about 450 million people in the Indian workforce, 129 million are outsourced by entities for reasons such as ease of operational execution and flexibility. But only 1 per cent of the outsourcing is in the formal sector flexi staffing within the overall workforce is 0.4 per cent.

TeamLease has a market share of about 5 per cent in terms of number of associate employees as of 2014. This is higher than both Indian and global players. The company’s revenue has grown 30 per cent annually between 2010-11 and 2014-15.

While the company offers other human resource services such as training solutions, 98 per cent of its revenue is from temporary staffing.

Game of scale
On the operating level, global players such as Adecco, Manpower and Randstad operate at 5-6 per cent EBITDA margins. TeamLease in comparison has a very small operating margin of about 1.1 per cent (2014-15). Economies of scale are likely to come in as volume grows, but will be long drawn.

Valuations

The price band of Rs 785-850 discounts the estimated 2015-16 earnings by 45-49 times, which is higher than the multiples of global players (12-15 times). Based on enterprise value to sales, the stock at about 0.5 times trades at par with global players. But weak margins do not support a comparable valuation.

The company also faces risk from competition from global players. The industry also remains highly fragmented and unorganised. TeamLease may have to look at inorganic ways to grow. Capital will have to be raised to fund acquisition and grow organically.

http://www.simpleinterest.in/teamlease-services-ipo-review-recommendation/

Avoid.

http://www.financialexpress.com/article/industry/companies/teamlease-services-ipo-to-hit-markets-on-tuesday-10-points-to-know/205157/

Only long term investors may invest.

http://myinvestmentideas.com/2016/01/teamlease-services-ipo-review/

Avoid.

http://m.economictimes.com/markets/ipos/fpos/teamlease-ipo-opens-tomorrow-six-key-risks-make-issue-avoidable/articleshow/50802987.cms

if hni or qib quota subscribe 100 times then i will do 10 applications in teamlease

Is it possible for one retail investor to apply more than 1 application from one pan n demat a/c, & get allotted for more than 1 application. As far I know if anyone apply more than 1 application, his all applications will b rejected.

Please take note of the following note in the prospectus

As per the prospectus, page number 34, "the average cost of acquisition per Equity share by our promoter is forth in the table below .

1) HROV - HR offshores ventures PTE ltd - 64,34,700 @ 0.42 Rs or 0.42 paisa
2) Dhana Mgt Consultancy - 13,79,886 @ as GIFT
3) NED Consultancy - 300 @ gift
4) MKS Mgt Consultancy Services LPP - 300 @ Gift.

I am sure to most people must have taken stock of the situation. The current IPO is coming at a price of Rs 850 and on top of that there is a grey market premium of Rs 250 . IN short, if the issue scales through, the mgt would have made more than 2600 times in lets say 15 years..... by any standards even the best Indian companies would be shocked at such valuations..

Thank you neo trade. that puts a lot of things in perspective.

Dear Boarders...have been seeing a lot of posts regarding the slim margins and concerns around the same. I would like to give a different perspective to put the slim margin issue in context...Please feel free to agree / disagree!

E-com companies report GMV (which is total value of good traded on their platforms) and also report net sales after netting off costs of those goods. Their P&L and margins are thus better analysed on net sales since that is their true sales and not GMV!

Similarly, for Teamlease, they book revenue which is the salary of the temp staff (equivalent of GMV in example above) and then they have a huge employee expense item (equivalent of cost of goods in example above)...since we are all basing margin analysis on Sales of Teamlease (equivalent of GMV in example above) the margins are bound to look slim and thus raise concerns!

Which is why I go back to my view that this business has to be analyzed on cash flow, negative working capital, RoE etc and not fret much over the slim margin profile which is a function of how revenues and costs are booked from an accounting perspective!

that is big demand from HNI may be that is reason for such high GMP..... boarders can a punt if that is case there would some euphoria factor which could be good short term gain on list

Hi ...

As per the prospectus, page number 34, "the average cost of acquisition per Equity share by our promoter is forth in the table below .

1) HROV - HR offshores ventures PTE ltd - 64,34,700 @ 0.42 Rs or 0.42 paisa
2) Dhana Mgt Consultancy - 13,79,886 @ as GIFT
3) NED Consultancy - 300 @ gift
4) MKS Mgt Consultancy Services LPP - 300 @ Gift.

I am sure to most people must have taken stock of the situation. The current IPO is coming at a price of Rs 850 and on top of that there is a grey market premium of Rs 250 . IN short, if the issue scales through, the mgt would have made more than 2600 times in lets say 10 years..... by any standards even the best Indian companies would be shocked at such valuations........

WHAT IS THE CURRENT PREMIUM OF THIS IPO?

What are the chances of alkem ,Dr lal,indigo, sh kelkar issuing bonus shares and dividends in the coming results?

None...

Nil

Not any buyer in Kostak

Looks Gmp is only on paper