CIEL HR Services gets nod from SEBI to launch IPO

CIEL HR Services Ltd, a provider of technology-driven human resources solutions, has received approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO). The final observations from SEBI were received on February 14. The IPO consists of a fresh issue of equity shares worth Rs 335 crore and an offer for sale (OFS) of 47.39 lakh equity shares by promoters and other selling shareholders. The shares have a face value of Rs 2 each.

Purpose of the IPO

CIEL HR Services plans to use the net proceeds from the IPO for several purposes:

• Acquisition of additional shareholding in subsidiaries.
• Investment in subsidiaries.
• Funding incremental working capital requirements.
• Unidentified inorganic acquisitions.
• General corporate purposes.

About CIEL HR Services

Founded in 2015, CIEL HR is among the top 10 players in the HR management sector. As of September 2024, CIEL HR Services had a revenue of Rs 1,100 crore. Pandiarajan Karuppasamy, the Chairman and Executive Director of CIEL HR Group, is recognized as the pioneer of outsourced HR management in India. He founded Ma Foi Management Consultants in 1992 and later sold it to Randstad in 2010. Hemalatha Rajan, the promoter chairperson and promoter director, was the original promoter of Ma Foi Management Consultants Private Limited. CIEL HR Services offers a suite of technology-driven human resources solutions across the human resource chain. The company's services include recruitment, staffing, payroll processing, strategic HR advisory, and skill development. Its technology platforms offer employee competency evaluation, learning enhancement, employee lifecycle management, upskilling, regulatory compliance, and workforce engagement. CIEL HR caters to a wide range of sectors, including retail, banking, quick commerce, and manufacturing. 

Offer for Sale (OFS) Details

The selling shareholders in the OFS include the founder-chairman Pandiarajan and his wife Lata, who will offload 25 lakh shares together. Other selling shareholders include Hemalatha Rajan (6.3 lakh shares), Aditya Narayan Mishra (6.3 lakh shares), Santhosh Kumar Nair (5.9 lakh shares), Doraiswamy Rajiv Krishnan (1.2 lakh shares), and other existing shareholders.

Financial Performance and Growth

Between fiscal years 2021 and 2024, CIEL HR Services achieved a compound annual growth rate (CAGR) of 62% in operating revenue. In comparison, the HR solutions industry had an average CAGR of around 18.1% during the same period. The company reported revenue of  ₹1,088 crore in FY2024, as compared to ₹ 801 crore in FY2023, reflecting an increase of 35.96%. The company’s profit surged from a loss of ₹3.15 crore in FY23 to a profit of ₹10.85 crore in FY24, reflecting a remarkable turnaround of 444.44%.

Book Running Lead Managers

Ambit Private Limited, Centrum Capital Limited, and HDFC Bank Limited are the book-running lead managers for the issue.

Additional Information

• Once listed, CIEL HR Services will become the 12th company to be listed in the HR outsourcing and staffing industry.
• As of June 2024, the company operated across 33 locations with 67 offices, of which 49 are run by business partners.

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