Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/tdcx-inc" target="_blank" data-smartkarma-citation="entities:34187:1" rel="noopener">TDCX (TDCX US)</a> provides digital customer experience solutions for innovative technology and other blue-chip companies. The company has announced the indicative IPO price range and the terms for its IPO. TDCX plans to offer 18.8m ADS (each ADS represents one Class A share) at an indicative price range of US$16-18 per ADS, and at the midpoint of US$17 per ADS, the company will raise gross proceeds of US$294.5 (assuming the over-allotment option is not exercised) at a market capitalisation of US$2.4bn and a post-money valuation of US$2.3bn.</p><table class="table table-striped"><tbody>
<tr><td colspan="2" style="width: 252.0pt;"><p style="text-align: center;"><strong>TDCX IPO Details</strong></p></td></tr>
<tr>
<td style="width: 175.75pt;"><p>No. of ADSs Issued</p></td>
<td style="width: 76.25pt;"><p style="text-align: right;">      18,772,000</p></td>
</tr>
<tr>
<td style="width: 175.75pt;"><p>Ordinary Shares per ADS</p></td>
<td style="width: 76.25pt;"><p style="text-align: right;">1.0</p></td>
</tr>
<tr>
<td style="width: 175.75pt;"><p>Shares Outstanding Post IPO</p></td>
<td style="width: 76.25pt;"><p style="text-align: right;">    142,272,000</p></td>
</tr>
<tr>
<td style="width: 175.75pt;"><p>Offer as a % of Outstanding Shares</p></td>
<td style="width: 76.25pt;"><p style="text-align: right;">13.2%</p></td>
</tr>
<tr>
<td style="width: 175.75pt;"><p>Price per ADS (US$)</p></td>
<td style="width: 76.25pt;"><p style="text-align: right;">16-18</p></td>
</tr>
<tr>
<td style="width: 175.75pt;"><p>Net Proceeds (US$m)</p></td>
<td style="width: 76.25pt;"><p style="text-align: right;">294.5</p></td>
</tr>
<tr>
<td style="width: 175.75pt;"><p>Market Capitalisation (US$m)</p></td>
<td style="width: 76.25pt;"><p style="text-align: right;">           2,418.62</p></td>
</tr>
<tr>
<td style="width: 175.75pt;"><p>Enterprise Value (US$m)</p></td>
<td style="width: 76.25pt;"><p style="text-align: right;">           2,339.12</p></td>
</tr>
</tbody></table><div style="text-align: left;" class="content-caption"><em>Source: Company disclosures (net proceeds, market cap and EV are at the midpoint of the IPO price range, we have used the net debt figure given in the roadshow presentation for EV calculation)</em></div><p>The company plans to use approx. US$188.0m (64.0%) of the net IPO proceeds to repay the loan obtained under the Credit Suisse Facility and the remaining net proceeds will be spent on expanding the company’s business into new markets and for general corporate purposes.</p>

TDCX (TDCX US) provides digital customer experience solutions for innovative technology and other blue-chip companies. The company has announced the indicative IPO price range and the terms for its IPO. TDCX plans to offer 18.8m ADS (each ADS represents one Class A share) at an indicative price range of US$16-18 per ADS, and at the midpoint of US$17 per ADS, the company will raise gross proceeds of US$294.5 (assuming the over-allotment option is not exercised) at a market capitalisation of US$2.4bn and a post-money valuation of US$2.3bn.
TDCX IPO Details

No. of ADSs Issued
      18,772,000


Ordinary Shares per ADS
1.0


Shares Outstanding Post IPO
    142,272,000


Offer as a % of Outstanding Shares
13.2%


Price per ADS (US$)
16-18


Net Proceeds (US$m)
294.5


Market Capitalisation (US$m)
           2,418.62


Enterprise Value (US$m)
           2,339.12

Source: Company disclosures (net proceeds, market cap and EV are at the midpoint of the IPO price range, we have used the net debt figure given in the roadshow presentation for EV calculation)The company plans to use approx. US$188.0m (64.0%) of the net IPO proceeds to repay the loan obtained under the Credit Suisse Facility and the remaining net proceeds will be spent on expanding the company’s business into new markets and for general corporate purposes.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<div><p>TDCX Inc, a Singapore-headquartered digital customer experience (CX) provider, is looking to raise up to US$338m in its upcoming US IPO.</p></div><div><p>TDCX provides outsourcing services to clients in new economy sectors and traditional blue-chip clients undergoing digital transformation. As of Jun 21, it served 43 global clients and with 114 active campaigns. The firm has offices located in 10 geographies across Asia, Europe and Latin America, namely, Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India, Columbia and Romania.</p></div><div><p>TDCX has recorded very strong growth with revenue, EBITDA and PAT having increased by 2.5x over FY18-20. In addition, Facebook and Airbnb, combined, contributed 60.4% and 62.3% of TDCX’s total revenue for FY20 and 1H21. </p></div><div><p>We have covered various aspects of the deal in our earlier note <a href="https://www.smartkarma.com/insights/tdcx-inc-pre-ipo-tearsheet" target="_blank" rel="noopener">TDCX Inc. Pre-IPO Tearsheet</a> and <a href="https://www.smartkarma.com/insights/tdcx-inc-pre-ipo-past-growth-looks-good-the-rest-is-iffy-including-the-founders-s-325m-payout" target="_blank" rel="noopener">TDCX Inc. Pre-IPO - Past Growth Looks Good, the Rest Is Iffy, Including the Founders S$325m Payout</a>.</p></div><div><p>In this note we will talk about valuations</p></div>

TDCX Inc, a Singapore-headquartered digital customer experience (CX) provider, is looking to raise up to US$338m in its upcoming US IPO.TDCX provides outsourcing services to clients in new economy sectors and traditional blue-chip clients undergoing digital transformation. As of Jun 21, it served 43 global clients and with 114 active campaigns. The firm has offices located in 10 geographies across Asia, Europe and Latin America, namely, Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India, Columbia and Romania.TDCX has recorded very strong growth with revenue, EBITDA and PAT having increased by 2.5x over FY18-20. In addition, Facebook and Airbnb, combined, contributed 60.4% and 62.3% of TDCX’s total revenue for FY20 and 1H21. We have covered various aspects of the deal in our earlier note TDCX Inc. Pre-IPO Tearsheet and TDCX Inc. Pre-IPO - Past Growth Looks Good, the Rest Is Iffy, Including the Founders S$325m Payout.In this note we will talk about valuations

TDCX Inc. Pre-IPO - Largest Client Is Growing Faster and Trading Cheaper

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.

<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.  

<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. TDCX has filed for an NYSE IPO to raise proceeds of $400 million, according to press reports. The IPO proceeds will be used to repay US$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><p>The business Support Services (BSS) industry has moved from a focus on cost arbitrage solutions to driving business outcomes and creating value for customers. There remains a significant portion of higher value-added workstreams that remain reliant on human expertise as businesses continue to deal with customers who request more engaging experiences. CX services, which is a subset of the BSS industry, is forecasted to grow 6.6% CAGR from 2021 to 2025 to reach US$100.4 billion in 2025, according to Frost &amp; Sullivan. </p><div class="content-highlight"><p>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. Overall, we believe that TDCX’s fundamentals are attractive.</p></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. TDCX has filed for an NYSE IPO to raise proceeds of $400 million, according to press reports. The IPO proceeds will be used to repay US$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.The business Support Services (BSS) industry has moved from a focus on cost arbitrage solutions to driving business outcomes and creating value for customers. There remains a significant portion of higher value-added workstreams that remain reliant on human expertise as businesses continue to deal with customers who request more engaging experiences. CX services, which is a subset of the BSS industry, is forecasted to grow 6.6% CAGR from 2021 to 2025 to reach US$100.4 billion in 2025, according to Frost &amp; Sullivan. 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. Overall, we believe that TDCX’s fundamentals are attractive.

United States

TTEC Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides customer engagement, experience consulting, care, and technology solutions. TTEC Holdings serves customers worldwide.

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TTEC Holdings (TTEC US)

TDCX IPO: Peer Comparison and Valuation

Our relative valuation implies that TDCX's IPO is attractively priced and our reverse DCF suggests annual revenues need to grow 9.5-11% to justify...

Shifara Samsudeen, FCMA, CGMA

TDCX Inc. Pre-IPO - Largest Client Is Growing Faster and Trading Cheaper

TDCX Inc, a Singapore-headquartered digital customer experience (CX) provider, is looking to raise up to US$338m in its upcoming US IPO.

Sumeet Singh

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

TDCX IPO Initiation: Good Service

TDCX has filed for an NYSE IPO to raise proceeds of $400m. TDCX’s differentiated value-added services are reflected in market share gains, high...

Arun George

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