Seshasaai Technologies
IPO Size: Rs. 813 cr
- Rs. 480 cr Fresh Issue for (i) Rs. 300 cr debt repayment, to become net debt free (ii) Rs. 198 cr brownfield capex
- Rs. 333 cr Offer for sale (OFS) by the promoters (93% stake to decline to 82%)
Price band: Rs.402-423 per share
- Rs.120 cr pre-IPO at Rs. 423 per share undertaken on 11th Aug25
M cap: Rs. 6,844 cr, implying 12% dilution
IPO Date: Tue 23rd Sep to Thu 25th Sep 2025, Listing Tue 30th Sep 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Mumbai-based Card Manufacturer
Seshasaai Technologies, formerly Seshaasai Business Forms Limited, is a 30 year old card manufacturer, enjoying 32% market share in the domestic duopoly market, and also India’s largest cheque leaves printer. The business has 3 revenue streams:
- Card (debit, credit, pre-paid, mass transit) and cheque manufacturing accounting for 60% of Rs. 1,463 cr topline, with segmental revenue being flat YoY in FY25, after accounting for Rs. 150 cr exceptional renewal revenue in FY24
- Document printing for bank and insurance companies contributes to 30% of revenue, but is stagnant at Rs. 430 cr since FY23
- IoT devices like radio frequency identification (RFID) tags etc. make up the balance 10% and has doubled YoY to Rs. 100 cr in FY25
Company has 24 plants, with 0.47 million cards and 1.67 million RFID tags per day capacity, utilised 45-65% across products in FY25.
Industry Prospects
While UPI has reduced debit card usage, new applications like metal cards and transit cards etc. lead to growth estimate of mid-single digit for the card manufacturing, company’s biggest segment. Document printing segment prospects are dull but IoT looks promising.
Company plans ~Rs.200 cr brownfield expansion for card and IoT segments, by 2027 and 2026 respectively, to meet long term demand. This capex is quite substantial, given Rs. 390 cr net fixed assets as of 31.3.25.
Financials
BFSI sector accounts for 85%+ of Rs. 1,463 cr revenue. FY25 revenue declined over FY24, due to Rs.150 cr one-off, excluding which topline grew at just 4% YoY, which is not exciting. High entry barriers though lead to attractive margins of 40% gross, 25% operating and 15% net. FY25 PAT of Rs. 222 cr translates to an EPS of Rs. 15 per share. RoE of 33% may moderate going forward, due to Rs. 600 cr dilution via IPO and pre-IPO.
Unique Business
In Dec 2024, 2 promoters did Rs. 250 cr secondary sale at Rs. 339 per share. 25% premium in IPO after 9 months looks steep for the stagnant revenue growth.
While not an exact peer, Seshasaai can be benchmarked with CMS Info, serving BFSI industry and clocking similar margin of 25% operating and 15% net. CMS, with Rs. 2,400 cr topline and Rs. 372 cr PAT in FY25 has a market cap of Rs. 6,600 cr, implying historic PE of 18x. On the other hand, Seshasaai’s Rs. 1,460 cr topline and Rs. 222 cr PAT makes Rs. 6,800 cr m cap (28x PE) a tall ask.
Even after accounting for lower interest outgo, H2FY26E onwards, current year PE of 24x makes the IPO fully priced.
Post listing, public float will be 18% only, with 6% retail holding. But on fundamentals, we don’t expect PE expansion due to low growth outlook.
