IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/tdcx-inc" target="_blank" data-smartkarma-citation="entities:34187:1" rel="noopener">TDCX (TDCX US)</a>, which is headquartered in Singapore, is a digital customer experience (CX) solutions provider for innovative technology and other blue-chip companies. </p></div><div><p>At the mid-point of the proposed IPO price range of $16.00-18.00 per ADS, TDCX will have a market cap of $2.4 billion. At the mid-point of the IPO price range, the net proceeds are $294.5 million, below the rumoured $400 million raise target. TDCX has received indications of interest worth 2% of the ADSs being offered from the founder, directors and officers. The IPO proceeds will be used to repay $188.0 million of the Credit Suisse facility (related to the acquisition of the founder’s interests in TDCX KY) and to expand into new markets.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/tdcx-ipo-initiation-good-service" target="_blank" data-smartkarma-citation="insights:57442" rel="noopener">TDCX IPO Initiation: Good Service</a>, we stated that in a competitive market, TDCX’s differentiated value-added services are reflected in market share gains, high growth and sector-leading margin. The key risk is the high dependence on two customers, <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> and <a href="https://www.smartkarma.com/entities/airbnb-inc" target="_blank" data-smartkarma-citation="entities:431:1" rel="noopener">Airbnb Inc (ABNB US)</a>. This customer risk is partly mitigated by long-standing relationships. We concluded that TDCX’s fundamentals are attractive.</p></div><div><div><div class="content-highlight"><p>Our valuation analysis suggests that TDCX is attractively valued to its customer experience (CX) centric peers, particularly at the low-end of the IPO price range.  </p></div></div></div>

TDCX (TDCX US), which is headquartered in Singapore, is a digital customer experience (CX) solutions provider for innovative technology and other blue-chip companies. At the mid-point of the proposed IPO price range of $16.00-18.00 per ADS, TDCX will have a market cap of $2.4 billion. At the mid-point of the IPO price range, the net proceeds are $294.5 million, below the rumoured $400 million raise target. TDCX has received indications of interest worth 2% of the ADSs being offered from the founder, directors and officers. The IPO proceeds will be used to repay $188.0 million of the Credit Suisse facility (related to the acquisition of the founder’s interests in TDCX KY) and to expand into new markets.In TDCX IPO Initiation: Good Service, we stated that in a competitive market, TDCX’s differentiated value-added services are reflected in market share gains, high growth and sector-leading margin. The key risk is the high dependence on two customers, Facebook Inc A (FB US) and Airbnb Inc (ABNB US). This customer risk is partly mitigated by long-standing relationships. We concluded that TDCX’s fundamentals are attractive.Our valuation analysis suggests that TDCX is attractively valued to its customer experience (CX) centric peers, particularly at the low-end of the IPO price range.  

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/firstsource-solutions-ltd" target="_blank" data-smartkarma-citation="entities:3099:1" rel="noopener">Firstsource Solutions (FSOL IN)</a> is a well-recognized BPO player with marquee clients globally. Its client base includes the likes of a leading auto lender in US, 5 of the top 10 mortgage servicers in US, 4 of the top 10 lenders in US, 3 of the top 5 credit card issuers in US, 3 of the top 6 retail banks in UK,  global media houses like Sky, 2 of the top 6 telecom and broadcasting companies in US, 5 of the top 10 health insurance/managed care companies and 650+ hospitals in US.<br><br>While the jury is still out there on how much the BPO industry would be impacted by COVID-19, we believe that from a medium-term to long-term perspective, it will only benefit led by accelerated digital adoption and outsourcing to enhance cost efficiency and improve operational resilience. Our strong outlook on the industry coupled with favorable valuation of FSOL makes us bullish on the stock.</p>
<p>Insight Flow:</p>
<ul>
<li>Q4FY20 Earnings Update</li>
<li>Business Background</li>
<li>FSOL's Competitive Advantages</li>
<li>Revenue Growth Drivers &amp; Margin Expansion</li>
<li>Valuation</li>
<li>Conclusion</li>
</ul>

Firstsource Solutions (FSOL IN) is a well-recognized BPO player with marquee clients globally. Its client base includes the likes of a leading auto lender in US, 5 of the top 10 mortgage servicers in US, 4 of the top 10 lenders in US, 3 of the top 5 credit card issuers in US, 3 of the top 6 retail banks in UK,  global media houses like Sky, 2 of the top 6 telecom and broadcasting companies in US, 5 of the top 10 health insurance/managed care companies and 650+ hospitals in US.  While the jury is still out there on how much the BPO industry would be impacted by COVID-19, we believe that from a medium-term to long-term perspective, it will only benefit led by accelerated digital adoption and outsourcing to enhance cost efficiency and improve operational resilience. Our strong outlook on the industry coupled with favorable valuation of FSOL makes us bullish on the stock.
Insight Flow:

Q4FY20 Earnings Update
Business Background
FSOL's Competitive Advantages
Revenue Growth Drivers &amp; Margin Expansion
Valuation
Conclusion


Firstsource Solutions: An Attractive and Undervalued BPO Player

United States

Exlservice Holdings Inc. provides offshore business process outsourcing solutions, primarily serving the needs of Global 1000 companies in the banking, financial services and insurance area. The service offerings include collections, cash management, loan servicing, research and reconciliation finance and accounting processes, customer support and technical support.

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Exlservice Holdings (EXLS US)

TDCX IPO: Valuation Insights

Our valuation analysis suggests that TDCX is attractively valued to its customer experience (CX) centric peers, particularly at the low-end of the...

Arun George

Firstsource Solutions: An Attractive and Undervalued BPO Player

Firstsource Solutions (FSOL IN) is a well-recognized BPO player with marquee clients globally. Its client base includes the likes of a leading auto...

Ankit Agrawal, CFA

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