Topsgrup planning 400-crore IPO for domestic acquisitions

MUMBAI: Security services provider Topsgrup, which counts billionaire investor Rakesh Jhunjhunwala and private equity funds ICICI Venture and Everstone Capital among investors, is planning to raise 400 crore through an initial public offering , or IPO, in six months, according to investment bankers with knowledge of the company's plans to raise funds.

The IPO, which will comprise a fresh issue of shares and an offer for sale, could set a benchmark in terms of the valuation for similar firms in the industry waiting to tap the primary market this year.

The company is close to appointing merchant bankers and is in talks with JM Financial , IIFL, Kotak Investment Banking and Enam for the issue, investment bankers said. The offer for sale will pave the way for part exit of some of the marquee investors.

Jhunjhunwala had earlier adopted the same route in another firm A2Z Maintenance where he had exited partly through the company's IPO.

The Mumbai-headquartered company will use the proceeds for strategic acquisitions in the domestic market to increase its market dominance.

"The company is planning to launch its IPO this year," Topsgrup's global chairman Diwan Rahul Nanda said. "It will be difficult to give any timeline and financial details now. The money raised through the IPO will be used to part fund possible acquisitions, predominantly in India. The additional money required for the buyouts will come from internal accruals," he said.

Tops Security, the flagship company of Topsgrup, is the first security firm in India to secure private equity funding in 2007. ICICI Venture invested 115 crore for a 13.66% equity stake, while Indivision India (now Everstone Capital), increased its stake in the company to 7.08% from 4.11% with an additional investment of 25 crore. Rakesh Jhunjhunwala & Associates, who invested in 2005, has a 10.41% stake.

In 2008, Topsgrup acquired a 51% stake in a leading UK security service provider, The Shield Guarding Company, for close to 125 crore. In the same year, it strategically acquired Bangalore-based Guardwell Detective Services and also acquired a 14.69% stake in Chennai-based security systems integrator firm Adtech Systems.

The total aggregate revenues of the firm for the financial year 2010-11 aggregated 800 crore with an EBIDTA of 43 crore. Topsgrup caters to over 8,000 customers, including top corporates such as TATA, Reliance, ICICI Bank , HSBC, IBM, GE and Nokia.

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