BLS E-Services Limited

BLS E-Services Limited-IPO DETAILS 

Company Overview 

The company operates as a technology-enabled digital service provider, specializing in offering Business Correspondence services to major banks in India, Assisted E-services, and e-government services at the grassroots level. With a widespread network of access points, including 1016 BLS Stores and 97,018 BLS touchpoints, the company facilitates the delivery of essential public utility services, social welfare schemes, healthcare, financial, educational, agricultural, and banking services. This enables the establishment of government-to-consumer (G2C) touchpoints, particularly in semi-urban, rural, and remote areas with limited internet penetration, where citizens require assistance in accessing technology-enabled services. The business correspondents segment of the company's operations involves providing various products and services such as opening savings and recurring deposit accounts, handling cash deposits and withdrawals, facilitating remittances and transfers, and offering bill collection services. These services are delivered through its subsidiaries, namely ZMPL and Starfin. The company's revenue streams include monthly commissions, transaction-based commissions, and Registration Fees. Additionally, the company offers point-of-sales services, ticketing services, and assisted e-commerce services. 

 Moreover, the company plays a crucial role in supporting various e-governance initiatives of State Governments in India by delivering information communication technology (ICT)-enabled citizen-centric services (E-Governance Services) through its extensive touchpoint network. These services include the registration of PAN, Aadhar, property registrations, and other related services. BLS E-Services has also entered into an MOU with the National e-Governance Division (NeGD) for agent-assisted delivery of the Unified Mobile Application for New-Age Governance (UMANG) services on its digital platform. The company charges a transaction fee for each service delivered, along with a fixed government fee.  

Objective of the IPO 

Here are a few quick reasons why company is going public:  

1. The company is focusing on enhancing its technological infrastructure and building new capabilities on its existing platforms to stay competitive and meet evolving market demands.  

2. Additionally, it is undertaking funding initiatives for organic growth by establishing new BLS Stores. The company also aims to pursue inorganic growth by making further acquisitions, strategically expanding its operations and market presence.  

3. Furthermore, part of its objectives includes addressing general corporate purposes, which may encompass a range of activities aimed at maintaining overall organizational health and efficiency. 

Company Financials 

Key Performance Indicator 

Pros 

1. The company operates on an asset-light business model, utilizing a franchise approach where its merchants own or lease BLS touchpoints. The primary role of the company is to provide access to its technological infrastructure, empowering these merchants to operate the touchpoints effectively. 

2. There are multiple cross-selling opportunities for the company, exemplified by the recent launch of the BLS Sewa App. This application serves as a comprehensive solution, offering various services such as money transfers, recharges, demat account opening, air ticket booking, and more, consolidating multiple offerings into a single platform.  

3. The company benefits from negligible customer acquisition costs due to the essential nature of its services in specific rural areas. As these services meet critical needs within these communities, the company incurs minimal expenses associated with acquiring customers.  

4. The company's growth strategy includes successful acquisitions, as demonstrated by the acquisition of Starfin India Pvt Ltd in August 2018 and Zero Mass Private Ltd. Both of these acquisitions significantly contribute to the company's revenue, with Starfin accounting for 21% and Zero Mass for 61% of BLS' overall revenue. These strategic acquisitions have played a key role in the company's overall success and market presence. 

Cons 

1. The company relies heavily on the fee and commission it charges consumers for its services. The rates are typically agreed upon through arrangements with state governments. Any adverse changes to these agreements can pose a significant risk to the company's earnings, potentially disrupting its financial performance. 

2. 's crucial to note that all E-Governance projects are awarded to the company's promoter, BLS International, rather than BLS E-Services. Given that BLS E-Services is responsible for a significant portion (28%) of the company's revenue, any developments or challenges faced by the promoter can impact the financial health of the company. 

3. The company has experienced a notable increase in revenue generated as a Business Correspondent, growing from 27.84% in FY21 to 66.05% as of September 2023. This concentration on a specific revenue stream, especially from the banking sector, exposes the company to risks associated with changes in the banking industry or the performance of specific banking partners. 

4. Approximately 60% of the company's revenue is derived from a single customer, a large PSU (Public Sector Undertaking) Bank. This high degree of dependency on a single customer poses a significant risk. Additionally, the absence of long-term agreements with the bank raises concerns about the sustainability of this revenue source and the potential impact on the company's financial stability. 

How to Apply for this IPO 

1. Go to https://ipo.adityatrading.in/ 

2. Enter your Client ID 

3. Enter the OTP received in your registered mobile number. 

4. Choose the IPO and click on apply button. 

5. Enter the UPI ID, Quantity, and Cut off the price. 

6. Click on submit button 

7. Confirm the mandate request received on your phone by entering the UPI Pin. 

You can also watch our youtube video on “How to Apply on IPO” by clicking on the link “https://www.youtube.com/watch?v=1qOI8dCpl1I&ab_channel=ATS”