TeamLease Services Ltd IPO Message Board (Page 37)

how many % for retailers in teamlease

10%

Thanks sir.. so can we expect listing gain?

Quick Heal Technologies Ltd. IPO
Opens - 08/02/2016
Close - 10/02/2016
Price Band - 311-321
Lot - 45 shares
Issue size - 445 - 451 Crs.
Allocation - QIB - 50%, HNI - 15%, Retail - 35%

Source of this information...????

The price for this IPO is very much on the higher side and not corresponding to company s earnings per share

Sone pe suhaga. Another jitter from China. Manufacturing fell to its lowest in 3.5 years. Manufacturing PMI index fell to 49.6. Meaning contraction. Market may drag down today.

Can understand pain of cancelling pricision ipo and negativeness after that......

Staripo muh kholega toh bakwaas hi bolega. Being practical and grounded to reality is also one thing. Which obviously u don''t have. Secondly, instead of putting constructive comments, u can only be critical of others. Shows what type of person u r.

Quick Heal Technologies Ltd. IPO
Opens - 08/02/2016
Close - 10/02/2016
Price Band - 311-321
Lot - 45 shares
Issue size - 445 - 451 Crs.
Allocation - QIB - 50%, HNI - 15%, Retail - 35%

NSE & BSE total Subscribe

FORGET about applying or not applying in Team Lease ipo , changes of getting an allotment is very rare
only apply for listing gains

Market has it own mechanism my gut feeling TEAMLEASE will be big flop show and PCL a big hit show

i agree Septa.
Although PCL might not give listing gain but would defintely be good for long to medium term as its growth prospects are good and check the interview been conducted with its owner. He seems quite confident. Also not sure why people comopare with CCD when CCD is loss making and PCL is profit making company.

TeamLease is too expensive stock . I dont think it can sustain this high market cap for long.

One should enjoy taste of mango,rather than going for tree.....

he flexi staffing business has high potential but the offer is pricey

January 31, 2016:
India’s large population and growing number of people joining the workforce each year presents a huge opportunity for staffing companies such as TeamLease.

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.

The current IPO is a combination of fresh issue of shares worth Rs 150 crore and an offer for sale (OFS) for 3.22 million equity shares. Of the Rs 150 crore raised, the company plans to Rs 80 crore for working-capital funding and about Rs 25 crore for strategic acquisitions.

Septa Sir,
What is the source of this report?

OK got it ...

http://www.thehindubusinessline.com/portfolio/firm-calls/teamlease-services-flexibility-at-a-price/article8175617.ece

Thx for the lead

teamlease too high pe ratio i will not apply i wait for another good ipo

Sensex either 8000 or 28000 ,90% PSU IPO/fpos are trading in huge discount .

Discount is becaof govt mulling another ofs of these psus,and fii and operators selled off to enter again on ofs.....

I m new investors .....
And i wish to know what i do in TS .....???
i know tulsiyan tells no ...but give me ur perfect view

Teamlease got its business concept from Hewitt operating in similar industry with two promoters hailing from there , when they used to be in employment. It supports as many as i00, 000 employees in various industry. Few boarders have done a great job of studying this in depth and stated their views including projected financials with reservation on it''s valuation. This kind of firm is many times looked from a different perspective and valued at exponential growth that can not be imagined. That is how , venture capitalist and PE funds look a this. One of the barometer used commonly is revenue per employee and ebidta/ PAT per employee model. Here is the biggest predicament as employee addition cant be taken in a year on year growth model. Suppose this firm acquires another contracting unlisted firm along with it''s clients & employee , its values change substantially. I have used this company for administration out sourcing in the past. Another similar Indian firm that provides manpower staffing in the same manner is TVS Logistics who manage activities of stores, receipt and dispatch of incoming , outgoing finished goods , transportation , work in process movement of materials including erp updating in several manufacturing companies in India by providing their staff or acquiring them.. Here again , normal practice is to hive off the business as well as the manpower already handling these functions to the out sourcing company with all liabilities of previous employees compensated from firm before shifting. Thus such an exponential growth often twists the future forecast substantially. Some of us who did not apply in Infosys IPO at a premium of Rs 85 in 1995 with similar risk perception as today felt happy at the poor listing, but after 2 years, history was made, Anyone who subscribed even 100 share and retained, is sitting on pile of few corers including dividends.Another view could be, team lease in itself could be taken over by one of the MNC upon creating the IPO market cap.

There are innumerable possibilities in this kind of issue. Having used their manpower, I must also admit that manpower offered by them is not the best in the industry. This may be attributed to the fact that , brightest minds don''t join a staffing firm at the first instance. This is a threat situation for this industry, if our economy were to take off as it is seeming to be now getting quality staff to these firms is far more difficult.

At 775 to 850 , in this falling market, several other opportunities exist. For example Yes Bank went up by 11% to 774 on Friday with fabulous results. for longer term investors such counters are available. I am not applying even if it means losing some immediate upside. However my views could also be stymied by the fact that , I have seen their services from close quarters. Those who have surplus funds can take risk of applying and keeping it if they have risk appetite or come out of it profit or loss.

Very good discribed.

Very good perspective....

I suggest that before we finalise our decision to invest in Teamlease ... we all should have a look at "Quess Corporation" ... which will be filing its DRHP next week (before the teamlease issue closes).

eagleye sir is it new ipo

Since many years are I am observing Ofs process. I found operators are playing big game on ofs day.
When ofs size is less that 2000 crore then allotment price is very high compared to floor price. I observed this in rec, pfc, eil and dredging.

Operators are playing game on ofs day - since morning they are taking stock price up and up from floor price. After 3 pm they suddenly take stock price near to floor price. Operators making big money here. They short stock in high price and after 3:15 pm they buy from market to settle transactions. This way they make lot of money. Retail investors are bidding on high price becaof high stock price before bidding close time 2:30 pm.

In yesterday''s eil ofs floor price 189, allotment price 197.15 and closing price at 3.30 pm 191.10. After 5 percent retail discount and brokerage retail investors allotment price comes near to closing price 190.10. Only waste of time whole day. Similar game I observed in rec, pfc, dredging.

Operators are playing game only in small size ofs not in big size ofs like oil India , coal India. Becaof big size few thousand of crores it''s not possible to take price high on bidding day.

Next time retail investors should take caution on this game act accordingly.

100% agree with u

That''s why Unchit I suggested everyone to avoid OFS. As such if u see the history, 90% OFS are trailing below their OFS price. See its always better to apply later from market. Don''t know why retailers run after OFS.

THIS SUMS UP TEAMLEASE IPO
TeamLease for IPO debut next week, to raise Rs 420 crore


The Initial Public Offering (IPO) of TeamLease, providers of human resources services in the organized segment sector, will open on February 2. A public statement by the company states that the IPO would be made through a fresh issue aggregating up to Rs.150 crore (a little over $22.5 millions), and an offer for sale of up to 32.2 lakh equity shares. Teamlease is offering equity shares of face value of Rs.10 each for cash at a price band of Rs.785 to Rs.850 per share. Shares of the company are proposed to be listed on BSE and NSE. February 1 has been reserved as the offer period for anchor investors.

The success of this IPO by Teamlease will eventually reinforce the potential of the HR industry and also their valuation, however, if it does not then it might affect the positive sentiment of the overall HR industry. HR as an industry is just not related to staffing – retail investors need to look beyond recruitment, and other segments in the industry offer profitability as well. The fact remains that even though the making business solely on HR services is difficult, and even verticals of the domain with higher profitability margins like technology enabled services may be more attractive for retail investors and better suited for IPO, but even those have not reached the scale and sustainability to command industry attention. Though skeptics will maintain scrutiny on TeamLease, and all eyes will be on how it performs, it wouldn''t be wrong to say that this could be an opportunity for organisations working in the sector to reiterate the potential and growth opportunities present. Maybe retail investors will shy away from going all out for TeamLease, since profit margins are a thorny issue, but the sector, and organisations working in the same are for a healthy growth in the coming years, which means such pieces of information are definitely good in the longer run.

The capital from the IPO, which will close on February 4, will be used for acquisitions and other investments (about 25 crore), upgrading the current IT infrastructure (about 15 crore), working capital requirements (about 80 crore) and other general purposes. 10,000 shares have been reserved for the employees of the organisation. TeamLease is expected to raise about Rs. 423 crore at the upper end of the price band. There is an offer for sale of around 1.5 million shares each by entities related to Gaja Capital and ICICI Venture, who will be partially exiting, and of 153,321 shares by the promoters. The selling shareholders will get as much as Rs 274 crore from the issue. The issue is being managed by IDFC Securities, ICICI Securities and Credit Suisse Securities (India) Pvt. The papers for the public offer were filed with SEBI in September last year and the approval was obtained last month.

TeamLease was founded in 2002, with four offices, 20 clients and 40 employees, and today is one of the largest temporary staffing companies in India in terms of revenues and number of associate employees in 2014, as reported by CRISIL. The organisations website states, “The company currently has 99,090 associates across the country and has till date provided employment to approx. 1.12 million people with an aim to hire millions more!” Currently operating from eight offices, TeamLease’s revenue has grown at an annualised rate of 30% in the last four years to reach 2,018 crore in Financial Year‘ 15. In the first half of Financial Year’16, the profit was Rs. 10.97 crore, a dip of 37% from 17.2 crore one year back. TeamLease is to become a unique type of HR services firm to be listed in the country and Ashok Reddy, MD, TeamLease has been quoted saying, "We are going for an IPO to get liquidity and institutionalising the company. A company listed on the stock exchange has more trust.”

The company is expected to be valued at over 1,400 crore, and the issue is being seen as aggressively priced, in an already unstable and turmoil-hit stock market. The offer has been graded by CRISIL Research and has been assigned a CRISIL IPO grade of ''4/5'' indicating that the fundamentals of the offer are above average relative to other listed equity shares in India. Since most IPOs from the last year are still in red, and returns not looking as promising in the current scenario, the move is being hailed as bold, and the confidence seems to stem from the growth in the flexi-staffing industry size over the past few years, which is about 14%. The industry is expected to grow to 9 million and represent 10% of the organised workforce by 2025. Reddy has said that Teamlease is clocking a return on investment of up to 40% compared to the average of 12% for global staffing companies and that the growth rate is three to four percent annually for global staffing companies compared to 25 percent for Teamlease. He has also said, “If we can maintain the current five to six percent growth rate, we can be the largest staffing company in the world."

While sceptics question the high valuation, which is at par with global peers but lacks the lower margin, the dependence of temporary workforce of economic activity and the high percentage of unorganised workforce in country, one thing is clear for the HR industry on the whole, that it is just waking up and realising its potential. Slowly, but surely, more players are showing interest in staffing as a business in itself. Although room for profitability might be low, due to the nature of the process and the competition, both national and international, yet investors and people are willing to bet on it. The fact retail investors now have a chance to invest in different segments and verticals of the HR Industry, is testament to the fact that TeamLease might just pave the way for more aggressively priced issues by organisations in the staffing industry.

TL is the first company that is organised in case of Hr solutions.I have noticed that each pvt comany say it in service ind or manufacturing is some how using services of out sourced company of hr solution but generally what happened that outsourced companies keeps on growing with similar industries and work in limited boundries.TL somehow crossed that boundry and organised the industry.may b I m wrong but I found huge potential in this field as you told about the avaition industry that next 10 year is the growth years of aviation ind .I think in line similar for this company and industry for broader term as we have ssen last 10 year was the year of service industry boom.

Before we finalise our decision to invest in Teamlease ... I recommend we all should have a look at "Quess Corporation" ... which will be filing its DRHP next week (before the teamlease issue closes).

One thing is certain ...TSL is good only for short term ,not for long ,never in portfolio.....also PCL not good for short term,but a portfolio stock for long term.....

Good analysis with reasoning

Dear retailers, I m skipping the issue. If u r applying, apply for listing gain only. Risk reward is there but only for short term. I see its price falling to 300/350 range in medium to long term. Best of luck. I am avoiding as I dont want to put my money in a stock where I m totally at the mercy of QIBs and NISs. Plus the growth of the company was never doubted but its profit margins are too thin. Such low profit margins makes this issue literally a time bomb. Slight negative in the company front and the stock would tank. So I m avoiding and recommending the same to others. Take a balanced view and decide the risk reward ratio before applying.

It''s going to be another just dial
..too much footage on IPO and then it tumbles...hope for the best

You have taken too much pre asumtion while doing dcf and I think that would not be case .they r in niche business and currently market leader.I think similar case of religare and dr lal path lab.valuation of dr lab path was too higher side but post ipo they got 50% return.reason was future growth that market and people were expecting.similar is the TLC.

Atul u r right with market likes and also rewards but for me it is no go zone i am just putting my view as u r putting ur view i am just saying avoid from my front and i am not always right.... Best of luck ATUL

one big difference is margin in case of Dr lal margin is 20% plus her margin is 1.5%