SIS to widen security perimeter with Rs 650 crore APS Group buyout

Mumbai: SIS Ltd, India’s largest business services company, is about to purchase APS Group for Rs 600-650 crore in what can be the biggest buyout within the private security industry within the nation until date, mentioned individuals within the know. APS is ranked sixth within the phase. The signing of binding agreements adopted by a proper announcement is probably going this weekend.

The transaction, anticipated to be accomplished in elements, may have SIS purchase 51% in step one. Over the following three years, relying on sure performance-linked milestones, SIS will purchase the residual 49%, leading to market consolidation.

Personal safety alone is a Rs 1 lakh crore trade as per a Ficci Grant Thornton report, using over 5 million personnel.

As soon as accomplished, the SIS headcount is more likely to contact 350,000, making it one of many largest non-public employers in India.

In addition to safety options, SIS additionally offers facilities management and cash logistics services. Services administration options embody cleansing, technical and tender companies, pest management and enterprise assist beneath manufacturers similar to DTSS, SMC, Uncommon Hospitality and PestX. It gives money administration companies via three way partnership SIS Money Providers and its subsidiary SIS Prosegur Holdings. They deal with money in transit companies, retail money administration companies, and ATM money replenishment. AP Securitas (APS) is a non-public firm owned by Anil Puri and his household. The corporate clocked Rs 1,100 crore in income in FY25. Buying it can assist SIS leverage expertise, capital and experience, particularly in key segments similar to BFSI and logistics. APS has a headcount of 40,000 workers.

After the consolidation, SIS’ income is about to the touch Rs 15,000 crore in FY26, as per trade estimates. For the most recent quarter, SIS posted revenue after tax of Rs 93 crore on Rs 3,549 crore income. The 2 firms are being valued at 8-10x Ebitda or 0.5-0.7x income, comparable with the trade vary. The transaction is anticipated to be funded purely by inner accruals.

SIS managing director Rituraj Sinha and APS Group couldn’t be reached for remark.

Massive headroom for progress

Established in 1974 by Ravindra Kishore Sinha, SIS operates in Australia (via MSS, after the acquisition of Chubbs Safety in 2008), New Zealand (via P4G) and Singapore (via Henderson), aside from India. It’s among the many prime 10 globally when it comes to income and workers. SIS has a pan-India presence via 293 department places of work, 50 regional places of work and 29 coaching academies.

The promoters, led by chairman RK Sinha and his son Rituraj, owned 72.14% of SIS on the finish of June. The remaining is held by institutional and retail shareholders, together with sovereign fund Abu Dhabi Funding Authority (ADIA), which owns 1.67%. Its present market worth is Rs 5,147 crore. Over the six months to early September, its share worth rose 20% on the BSE in anticipation of progress stabilising after Covid-led market disruptions.

SIS has attracted institutional capital to gasoline its enlargement. It raised Rs 50 crore from DE Shaw in 2007, promoting a 14% stake. DE Shaw exited in 2013, promoting to CX Companions at a sevenfold return. CX Companions exited after SIS was listed in 2017.

SIS sees important headroom for progress in India, the place it has solely a 5% market share versus world friends who’re at 10–15%. The safety companies trade includes 20,000 small to mid-sized unorganised firms with solely 8-10 working pan-India. Intense competitors constrains scalability, pricing energy and profitability, mentioned a Crisil report.

Unorganised gamers maintain round 65% of the home market and organised firms may even see their share improve over the medium time period, with extra deal with compliance and stricter enforcement of the minimal wage invoice, in addition to the implementation of laws pertaining to the trade.