Darshan Perera - CEO, NDB Investment Bank, Zakir Mohamedally, Group COO and Head of Investment Banking, CT CLSA Holdings, Dinesh Saparamadu, Chairman, hSenid Business Solutions Ltd, Sampath Jayasundara , CEO and Executive Director, hSenid Business Solutions Ltd and Nilendra Weerasinghe, Chief Corporate Advisory Officer, NDB Investment Bank
hSenid Business Solutions, a Lankan based HR solutions software company, is looking to list on the Colombo Stock Exchange to raise Rs 692 million. The offer will look to offer 55 million ordinary non-voting shares in the company at a price of Rs 12.5.
The stake offered to the market represents 20% of the equity base in the company at a Price to Earnings ratio of 13.2. Of the funds raised the bulk (Rs. 350 million) will be used to acquire businesses in the APAC region to fuel inorganic growth in the company. Rs. 202 million have been earmarked for product development and expansion of their B2B marketplace. Rs. 140 million have been earmarked for the development of their global partner network.
hSenid Chairman Dinesh Saparamadu noted that though the country was currently facing forex issues this would not be an impediment over the long term in maintaining the capacity to make foreign growth-oriented investments. Saparamadu also noted that the company has large invoicing through its Singaporean entity which would help circumvent the local banking sector.
hSenid maintains that over 98% of its invoicing is dollar-linked with over 48% of revenues coming in the form of hard currency.
Saparamadu was speaking on November 23 at the initial IPO conference of hSenid held at the Jetwing Hotel in Colombo 07. hSenid is one of the current market leaders in the Sri Lankan marketplace for HR solutions.
They provide services to the leading banks, insurance, and conglomerates in the country. The company has also been able to secure a contract to completely automate the HR systems of the Ugandan government. The company has also had success in selling services in Kenya, Brunei, Bangladesh, and India. The company uses a partner model for expansion where foreign partner firms help sell the hSenid solutions. Over 48% of hSenid’s revenue are recurring with a customer retention rate exceeding 95%. The company has over 25 internally developed modules and over a million users giving it significant ecosystem advantages over the competition.
The company has a gross profit margin of 54% and a net profit margin of 22%.
The company currently employs over 250 employees. The company has a return of equity of 31% and a negligible amount of gearing on its balance sheet. In the fiscal year 2021, the company had revenue close to Rs. 1 billion and is expected to have Revenue of Rs. 1.1 billion in the fiscal year 2022.
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