Temasek to pick up 18% stake in VFS Global for $950 mn: Report
Source: Moneycontrol https://search.app/?link=https://www.moneycontrol.com/news/business/temasek-to-pick-up-18-stake-in-vfs-global-for-950-mn-report-12844052.html&utm_source=dsdfns,sh/x/discover/m1/5
I wonder if any profitability numbers such as EBIDTA are available for VFS Global. We could have done a comparative valuation for BLS, then. Might be difficult to get since it’s privately held.
You can refer Shankar Nath Post dated 15.09.2024
get rough idea
could you share the link for the same?
Hi All, Does this recent acquisition SLW Media make sense?
BLS has made a really good move by the acquisition of SLW Media. This acquisition allows the company to diversify beyond its core visa services into luxury lifestyle and sports tourism, aligning its brand with high-end leisure activities. It also enhances the company’s ability to reach end consumers directly, something it hasn’t been able to do in its typical government services business. Additionally, BLS plans to leverage its global presence in over 66 countries to expand the reach of SLW Media’s golf events, creating a synergy that will boost its brand perception as a provider of both elite services and global access. In short, This move will also allow BLS in Diversification of Revenue Streams, Brand Visibility and Promotion (using the reach of SLW ), Digital Transformation, etc.
But visa service and golf events have nothing in common. Could you please explain how is this move beneficial? To me it seems like something out of their domain at the moment.
Overall its my experience is that BLS service is not generally good. its just those monopoly contracts help them keep growing.
i dont know about the culture of company being acquired and hope that BLS do not spoil the culture of new company as well
I started studying BLS for potential investment. I have a few questions. Would be great if forum members that have studied/invested could provide some insights.
In Q2 FY25 concall, management mentioned - “Furthermore, our net revenue per application has also increased from INR1,988 in Q2 FY '24 to INR2,883 in Q2 FY '25”. Would anyone know what are the contributing factors to this? Close to 50% increase is phenomenal, but going through the con call/investor I could not understand what is contributing to this. Management mentioned transition from partner model is primary reason for EBIDTA improvement, that would be on costs side rather than revenue side. also, 50% increase within just one year seems very high.
In essence, this business is a BPO/KPO business in a niche area with reasonably high barriers to entry. Is my assessment right?
On the balance sheet for Sep 24 there is a goodwill of ~700 Cr. Is that due to acquisition of iData?
Does BLS get paid in foreign currency? Do we know if the currency fluctuation impacts their topline and bottom line significantly? Are they hedged?
If the visa processing and related business is high margin and big TAM, why get in to E Services business with lower margins at all? Why would the company diversify into a business which is inferior by nature of high competition and lower margins?
While going through this thread there were mentions that company will need to pay taxes if they bring in cash parked in Dubai. In the Q2 concall management mentioned most of the cash is in India. When did this movement to India happen? Or did they just use the money abroad for acquisition and therefore India cash balance went up?
In Q2 concall, management was all gung ho about future prospects. How is the experience with this management in terms of outcomes being inline with what they project? I generally like managements that don’t overpromise.
Till when is their Spain contract in force? contributing 25-30% that seems to be the major topline contributor.
Disc - no investment at present. Studying for potential investment.
Answer on point by point
You can read Shankar Nath post on this company. To get fair idea of the business and working style
I can’t make sense of these acquisitions/share subscriptions.
BLS seems to have identified hotels/hospitality as a potential diversification(!) hence subscribed to 51% of a new hotel company in which the promoter is taking a 49% stake.
BLS is also taking a stake in a company whose business seems even more sketchy
" ASPL is engaged in distribution and processing of secured and unsecured loans for corporates and individuals. ASPL is rendering services like loans against property, personal loans, credit card, home loans, business loans and working capital financing, etc. "
Completely agree. Unable to understand why don’t they buy their own stock, I really like the core business but seems like to get growth, they will continue to make these random acquisitions.
Do we know return metrics on the recently acquisitions?
BLS visa is a good business but I am starting to get annoyed with these many, small and seemingly irrelevant acquisitions. This Hotel business where promoters will buy the remaining 49%.
I am also getting nervous about ASPL, loan distributors? How do you even quantify risk in the Balanace sheet.
P.s. Invested
@shankarnath , would like to get your thoughts on some of these seemingly unrelated recent acquisitions. If one has a scalable, asset light business model with good opportunities, which I think BLS has, what is the need for such acquisitions? {Even before these, one of the risks that I could think of in this company, was of a bad large acquisition by a management getting aggresive for growth.}
Thankfully, these are not large enough for us to worry about right now, but do you see any cause for heightened alert? Or are we missing something?
Asking you since you have studied the company in-depth as evident from your detailed blog. Thank you!
why growth company will buy its own shares?
For a company if there are no growth opportunies than only they will buy own shares.
No I agree they are growing, but looking at the random acquisitions into lending, hotel, etc., its better you buy your own stock which is 30+ ROE.
Nothing is random… The promoter is smart enough to build the adjacencies… Dont forget the business comes from govt babus…ie Diplomats… You need to entertain them also… The management might not be very transparent but they are super smart…They know what they require in the business… if you look at the whole ecosystem, it all fits in …
would really appreciate some breakdown for the not so smart folks like me.
Rightly said. This also reflects in answers when someone asks about growth in concalls, Management always replies that their priority is first to maintain the levels they have achieved in Top line and on margin front. Plus they separately listed e-services business, so that both verticals can get valuations accordingly. And their all big acquisitions are margin accretive.
