Quess Corp logs best listing gains in 2 years

NEW DELHI: Staffing firm Quess Corp on Tuesday made history, logging the best listing gains in two years. In a stellar debut, the stock opened trading on BSE at Rs 499, a 57.41 per cent premium over its issue price of Rs 317. The last issue to have listed with a significant premium was Sharda Cropchem at 62 per cent in September 2014.

A peer to TeamLease Services, the debutant eventually settled the day at Rs 503, up 58.67 per cent on BSE after hitting an intraday high of Rs 508.60.


(Image source: The Economic Times)

This was yet another IPO after Mahanagar Gas, which saw huge listing gains. Mahanagar Gas earlier this month had listed at Rs 540 on BSE, which was 28 per cent premium to its issue price of Rs 421 a share.

The issue ran between June 29 and July 1.

Data suggests that the subscription to Quess Corp at 144.50 times was the highest since January 2008.

In January that year, Future Capital had got 132 times subscription to its IPO, while in November 2007, Religare Enterprises' Rs 140-crore issue was subscribed 160 times — the highest ever.

Many brokerages had recommended subscribe to the issue, given the capitalising of business-to-consumer (B2C) opportunities, robust earnings rowth and sound financial ratios, healthy track record of growing via inorganic route and focus on margin improvement.

The company's top 10 clients contributed just one-third to its total revenue, which reduces its dependency on specific clients.
Among the key concerns, Hem Securities had said “"With a large number of acquisitions, there is always a concern for company whether it will be able to successfully integrate the acquired businesses into its existing operations. In addition, certain entities, in particular Brainhunter and MFX, were loss-making entities when acquired. An inability to integrate or manage these acquired businesses or entities may result in increased costs and adversely affect co's results of operations."

Quess has managed its debtors days in the range of 40-45 days, it is more diversified, de-risked and profitable than most of its competitors, analysts said.

Shares of Thomas Cook, the parent firm, were trading 0.86 per cent higher at Rs 222.25. TeamLease Services was trading 1.53 per cent lower at Rs 1,082.