Teamlease expands into IT staffing, Quess Corp IPO
TeamLease announced the acquisition of ASAP Info Systems for Rs 67 crore last week. At the time of IPO, Teamlease’s management had announced that some of the proceeds of the IPO would be used for acquisitions to bring margin expansion via new product verticals and new client segments. This acquisition is the first since its public listing last February and marks the entry of TeamLease into IT staffing, where it will compete with established players such as Randstad and Kelly Services.
This acquisition also means the entry of Teamlease in the core IT hiring space. ASAP Info Systems is a Tier 1 staffing provider, with over 1,000 associates and 170 core employees and offer IT staffing solutions to various MNCs and domestic companies. The company reported an EBITDA of Rs 11 crore in FY16 on a revenue realization of about Rs 63 crore. For Teamlease, 98% of their Rs. 2,000 crore topline comes from temping business, a segment that traditionally has suffered from low margins. Teamlease reported revenue of R 2,021.8 crore in 2014-15 with a net profit of Rs 30.7 crore. Its shares were up by 2.89 percent post the announcement.
A peer to TeamLease, Quess Corp hit capital markets to raise Rs 400 crores last week and got fully subscribed on day 2 and was oversubscribed by 144 times on closure. Quess Corp business focus is into recruitment, temporary staffing, technology staffing, skill development, payroll, compliance management, IT products and solutions, industrial asset management services and integrated facility management. Economic times reported that the IPO proceeds would be used to reduce debt, fund CapEx and meet the working capital requirement, besides funding acquisitions and other strategic initiatives, which will contribute to further growth of the company.
These last few weeks have also seen investments in the HR tech products space. Greytip Software, a leading provider of HR and Payroll solutions to SMEs & enterprises across India, raised Rs. 35 crore in its series B round of funding from New Enterprise Associates (NEA) and Blume Ventures expand its business. Additionally, Darwinbox, a Hyderabad-based HR software-as-a-service (SaaS) startup has raised seed funding led by Mohandas Pai's 3one4 Capital, Endiya Partners and Tracxn Labs to fuel their expansion plans.