Dynamic Services and Security
Dynamic Services and Security has come out with an initial public offering (IPO) of 47,32,000 Equity Shares of face value of Rs 10 each for cash at a fixed price of Rs 51 per equity share.
The issue has opened on September 30, 2021 and will close on October 5, 2021.
The shares will be listed on NSE Emerge Platform.
The share is priced 5.10 times higher to its face value of Rs 10.
Book running lead manager to the issue is Finshore Management Services.
Compliance Officer for the issue is Sushma Kumari Agarwal.
Profile of the company
The company was established in the year 2016 by Jugal Kishore Bhagat, along with Rekha Bhagat, Promoters of the Company with a vision to build a professional organization with a corporate set up in the service sector. Prior to this, Jugal Kishore Bhagat was operating his business under a proprietorship concern namely Dynamic Services, since 2008 and was carrying on the business of manpower services particularly in the field of Mechanized Cleaning, Catering, Housekeeping, Conservancy Service, Security Service, Catering Services, Contractual services, Logistics and other related services majorly for Indian Railway and other Reputed Government Organisations on a pan India level over the last ten years. Rekha Bhagat, its other promoter was operating under the proprietorship concern i.e., Dynamic Enterprises, since 2010 onwards wherein the principal business was into providing Logistics Solution along with manpower services and other related services for varied corporate sectors. Rekha Devi Bhagat was operating under the proprietorship concern Global Services since 2012 and doing the business of Logistics Solutions along with manpower services and other related services for varied corporate sector.
The company has a team of young, energetic & self-motivated persons with extensive experience in Cleaning, Housekeeping, Catering, Security Service & Man Power Supply and with their deep understanding of the business and experience coupled with strong commitment leverages the tremendous opportunity in the private & Govt. sectors dominated by unorganized and fragmented players. It focuses on operating models that integrate functions of customers, suppliers and end users. Dynamic is an ISO 9001:2015 (Quality Management System) and ISO 45001:2018 (Occupational Health & Safety Management System) certified organisation. LMS Certifications Private Limited has independently assessed and found it compliant with the requirement of ISO certification for providing Mechanized Cleaning, Conservancy Services, House Keeping, Security Services and Manpower Supply.
Proceed is being used for:
Meeting the working capital requirements of the company.
Meeting the issue expenses.
General corporate purposes.
The services sector is not only the dominant sector in India’s GDP, but has also attracted significant foreign investment, has contributed significantly to export and has provided large-scale employment. India’s services sector covers a wide variety of activities such as trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, business services, community, social and personal services, and services associated with construction. Share of the services sector accounted for 55.39% of the total GVA in FY21. India’s services sector GVA increased at a CAGR of 11.43% to Rs. 101.47 trillion ($1,439.48 billion) in FY20, from Rs. 68.81 trillion ($1,005.30 billion) in FY16. Between FY16 and FY20, financial, real estate and professional services augmented at a CAGR of 11.68% (in Rs. terms), while trade, hotels, transport, communication and services related to broadcasting rose at a CAGR of 10.98% (in Rs. terms).
According to RBI, in April 2021, service exports stood at $21.17 billion, while imports stood at $10.61 billion. The India Services Business Activity Index/ Nikkei/IHS Markit Services Purchasing Managers’ Index fell to 46.4 in May 2021 from 54.0 in April 2021, as output and new orders declined due to COVID-19-induced restrictions to contain the spread of coronavirus. The Government of India recognises the importance of promoting growth in services sector and provides several incentives across a wide variety of sectors like health care, tourism, education, engineering, communications, transportation, information technology, banking, finance and management among others.
Pros and strengths
Organizational stability along with management expertise: The company’s proprietorship firms, which has been taken over by the issuer company have an established track record of over 13 years, indicates its ability to overcome any challenges in economic and business cycles and its able leadership with a competent team makes lot of difference and put use ahead and have emerged as a most preferred services provider to its clientele. Team Work is the core in its corporate set-up wherein including its promoters along with a talent leadership team drives its overall business thus ensures quality and timely services to its clients.
Existing supplier relationship: The company’s existing supplier relationship protects the business with terms of supply and pricing of the products and services, the quality of the products and services offered etc. It, being a small and medium size organization, relies on personal relationships with its suppliers. Further it also leverages the past experience of its management in maintaining effective supplier relationship ensuring uninterrupted supply chain management.
Well-defined organizational structure: The company has a qualified and experienced management team empowered to take timely decision which makes the operations of its business more smoother and ensures efficiency in all aspects of its operations. Its management and leadership team is drawn from the best in the industry. Its senior management has pioneered its growth and fostered a culture of innovation, entrepreneurship and teamwork within its organization. A motivated and empowered employee base is key to its competitive advantage. Its Human Resources Policies are aimed towards recruiting talented employees, facilitating their integration into its organization culture and encouraging the development of their skills and expertise for becoming the next generation leaders.
Risks and concerns
Revenues highly dependent on clients located in India: The company has derived a substantial portion of its revenue from services offered to clients based in India only. If the economic conditions of India become volatile or uncertain or the conditions in the financial market were to deteriorate, especially in recent times due to the COVID-19 pandemic, or if there are any changes in laws applicable to its services and operations or if any restrictive conditions are imposed on it or its business, the pricing of its services may become less favourable for it. Further, its clients located in these geographies may reduce or postpone their spending significantly which would adversely affect its operations and financial conditions. Any reduction in spending on third party logistic services may lower the demand for its services and negatively affect its revenues and profitability.
Require high working capital: The company’s business demands substantial funds towards working capital requirements. In case there are insufficient cash flows to meet its working capital requirement or it is unable to arrange the same from other sources or there are delays in disbursement of arranged funds, or it is unable to procure funds on favourable terms, it may result into its inability to finance its working capital needs on a timely basis which may have an adverse effect on its operations, profitability and growth prospects.
Depends on number of key managerial personnel: The company’s performance depends largely on the efforts and abilities of its senior management and other key managerial personnel, including its present officers who have specialized technical know-how. The inputs and experience of its senior management and key managerial personnel are valuable for the development of its business and operations strategy. It cannot assure you that it will be able to retain these employees or find adequate replacements in a timely manner, or at all. The company does not maintain any director’s and officer’s insurance policy or any keyman insurance policy. The loss of the services of such persons could have an adverse effect on its business, results of operations, cash flows and financial condition.
Incorporated in 2016, Dynamic Services & Security offers manpower solution services in the field of Mechanized cleaning, catering, housekeeping, security, logistics, contractual services, and other services. It provides Guarding/Custoridal services, integrated facility management, and digitalization services. The company offers a comprehensive range of customized services in both the public and private segments to meet customers’ requirements. Over the years, the company has developed a wide clientele base and this was done with its valued based relationship approach. Its existing relationships help it to get repeat businesses from its customers. It is providing comprehensive end-to-end customized manpower solutions to its clients. The company focuses on attaining highest level of customer satisfaction. On the concern side, the company has not covered itself against business or operational risks. However as per the contractual terms with mainly the government projects, labourers ESIC registration has to be taken and accordingly as per the specific project requirement and specific labourers deployment, ESI coverage is extended/covered. While the logistics industry in India is generally fragmented, the company may face competition from a number of international and domestic third-party logistics service providers, especially as the trend toward larger-scale logistics providers in India continues.
The company is coming out with an IPO of 47,32,000 equity shares of Rs 10 each at a fixed price of Rs 51 per equity share to mobilize Rs 24.13 crore. On the performance front, during the FY 2020-21 the revenue from operation and other income of the company increased to Rs 7096.31 lakh as against Rs 46.53 lakh in the FY 2019-20, since from FY 2020-21, the company started recognizing the turnover of the three proprietorship firms which were taken over, in its books. The restated Profit after Tax for FY 2020-21 has increased to Rs 103.86 lakh as against Rs 1.53 lakh in the FY 2019-20, since from FY 2020-21, the company started recognizing this Profit after tax of the three proprietorship firms which were taken over, in its books. As a part of the company’s growth strategy its focus is on increasing sales volume through expansion, diversification and spread in geographical outreach. The company is going forward with its plans to establish its presence in the more geographical potential regions. Its emphasis is on expanding the scale of its operations as well as growing its supply chain network, which will provide opportunities to grow its clientele base which in turn will boost revenues.