Can Manipal Payment and Identity Solutions IPO deliver long-term growth for high-risk investors?

ET Intelligence Group: Manipal Payment and Identity Solutions plans to raise ₹320 crore through a fresh issue to expand capacity and ₹485 crore through an offer for sale. The promoter stake will fall to 53% after the IPO from 62%. The company is expected to benefit from growing card issuance, driven by increasing banking and financial services penetration, and demand for driving licences, registration certificates and mobility cards. However, regulatory changes in the payments industry could increase compliance costs and affect demand for some products. Given these factors, the issue appears to be suitable for long-term investors with a higher risk tolerance.

Business

Incorporated in 2008, the company provides payment cards, identity solutions, secure printing, and smart tagging solutions to banking and finance sector, and government agencies across India and international markets. It accounted for about 36% of credit card issuance and 31% of debit card issuance in India in FY26. Cards contributed 57% to revenue in FY26. The company manufactured 86.2 million payment cards in FY26, up from 51.8 million in FY22. Its international business contributed 7.2% to FY26 revenue, with export sales nearly doubling to ₹95.7 crore from ₹54.4 crore a year earlier.


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Financials

Revenue rose to ₹1,326.8 crore in FY26 from ₹1,247.5 crore in FY24. Operating margin before depreciation and amortisation (EBITDA margin) expanded to 33.6% from 28%, remaining above Seshaasai Technologies' 27.4% in FY26. Net profit rose to ₹253.5 crore in FY26 from ₹249.1 crore in FY24. Return on equity fell to 29.4% in FY26 from 79% in FY24, partly reflecting the nearly ₹220 crore investment in capacity expansion. Despite the decline, ROE remained well above the peer's 16.7%.

Valuation

The company demands a price-earnings (P/E) multiple of up to 31.5 on post-IPO basis compared with a P/E of 26 for Seshaasai Technologies.