MPS Ltd

MPS has been growing from strength to strength over the last several qtrs. The Co. holds calls after its quarterly numbers, the transcripts of which are available, so one can get a very good idea about the various dimensions of the business.

Apart from organic growth, the Co. has been acquiring companies abroad & integrating them. What has changed is that earlier it was acquiring Co.’s in distress at throw away valuations, which had a longer turn around period. Subsequently, it decided to change strategy & has started acquiring running profitable Co.’s at reasonable valuations that are earnings accretive in the very first year. The last acquisition of E.I. Design was one such case. Having merged it successfully, it is feeling confident of repeating the process with other acquisitions for which it is planning a QIP for about 250 crs.

Given below is part of the explanatory statement that comes with the Postal ballet, which gives decent insights into its business plans going forward. The markets have not been enthused by the proposed equity dilution and the stock has been hammered down post the announcement from 1100 to around 900 levels. This is quite likely a knee jerk reaction. Here is a Co. that is finding plenty of growth opportunities & raising funds for that purpose when many Co.’s are struggling for growth. The fall in the share price, though sharp, has been on low delivery volumes, perhaps suggesting the bears having a field day. A just as sharp reversal is always a possibility in such cases. The current correction appears to be a decent buying opportunity.

EXPLANATORY STATEMENTS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 SETTING OUT ALL MATERIAL FACTS: ITEM 1: TO CONSIDER AND APPROVE THE PROPOSAL FOR CAPITAL RAISING IN ONE OR MORE TRANCHES BY WAY OF ISSUANCE OF EQUITY SHARES AND/OR EQUITY LINKED SECURITIES BY WAY OF QUALIFIED INSTITUTIONS PLACEMENT (“QIP”) This is to update the shareholders that the management has ambitious plans to build meaningful scale for the Company in the coming years. Coming out of the Pandemic, the Company has gained impressive momentum. All business segments are performing ahead of expectations, and the Company is now a provider of choice in its markets. Five levers power MPS‟ growth strategy in the coming years, including leading with a market-based approach, scaling STAR accounts, acquiring new customer logos via compelling marketing, developing new capabilities, and acquiring growing assets that further add to the momentum. The recent acquisition of E.I. Design Private Limited was a successful demonstration of the revised acquisition strategy, and the successful integration of E.I. Design Private Limited into the Company has given tremendous confidence to build upon the momentum. 2023 is turning out to be another year of expansion for MPS. The Company continues to evaluate acquisition opportunities to grow and strengthen its financial position. Further, the industry that MPS operates in is highly fragmented and is ripe for consolidation. Growth through the inorganic route provides opportunities to enhance product/service offerings, build scale, and further consolidate the Company‟s position as a market leader. The Company is considering various means to tap these growth opportunities, including strategic acquisitions, investments, and buyouts. The Company has multiple options at an advanced finalization stage and competitive price points. Hence, it is imperative to have access to ready funds so that the Company can close these opportunities efficiently and on time.