Quess Corp’s ~680-crore OFS subscribed 5 times

The ~680-crore offer for sale (OFS) by Quess Corp saw five times more demand than the shares on offer. Promoters Thomas Cook and Ajit Abraham Isaac offloaded about six per cent stake in the company through the OFS, to comply with the 25 per cent minimum public shareholding norm. The base price for the 8.5-million share sale was fixed at ~800 apiece; however, most bids came at ~837. Shares of Quess on Thursday ended at ~857, down 6.2 per cent on the BSE. About 850,000 shares, reserved for retail investors, will be auctioned on Friday. Following the share sale, the promoter holding in the company will drop to 75.38 per cent, from 81.52 per cent. Axis Capital and India Infoline acted as investment bankers for the deal. Quess Corp is a technology solutions and manpower staffing company, with a market capitalisation of ~11,855 crore. Motilal Oswal has a ‘buy’ rating on the stock, with a price target of ~1,170. “Valuations are rich, given its strong growth history and continued aggressive thrust on acquisitions. Over FY17-20E, we expect revenue/Ebitda/net profit CAGR of 31 per cent/42 per cent/62 per cent, led by our assumption of 20 per cent growth in the organic business and incremental contribution by recent acquisitions. Long-term prospects stand bright, given high-growth opportunities, aggression shown on expansion and flawless execution,” said a note by the brokerage.