PAN HR Solutions IPO

PAN HR Solution Limited is a professionally managed human resource services company incorporated on December 23, 2015 as PAN HR Solution Private Limited. The company was later converted into a public limited company on May 19, 2025, reflecting its growth ambitions and readiness for capital market participation.

The registered office is located at:

A-42/03, Second Floor, Sector-62, Gautam Buddha Nagar, Noida – 201301, Uttar Pradesh, India.

Key Corporate Details

Company Evolution Timeline

PAN HR Solution operates in the HR outsourcing and staffing services industry, offering workforce solutions to corporate clients across sectors such as manufacturing, logistics, retail, healthcare, and infrastructure.

The company operates in India’s rapidly growing Human Resource & Staffing Services Industry, driven by increasing outsourcing, formalization of labor, and compliance requirements.

Indian HR & Staffing Industry Overview

Key Growth Trends

• Rising demand for flexible workforce models

• Expansion of manufacturing under Make in India

• Growth of organized retail and logistics

• Increased labor law compliance requirements

• Digital HR and payroll automation

Regulatory Landscape

The HR industry is governed by multiple labor and employment laws such as:

• Contract Labour Act

• EPF & ESI Acts

• Minimum Wages Act

• Industrial Disputes Act

Future Outlook

India’s staffing industry is expected to benefit from:

• Infrastructure development

• Warehousing and logistics growth

• Healthcare sector expansion

• Increased formal employment

Overall, the industry provides strong long-term growth opportunities for structured HR service providers like PAN HR Solution Limited.

PAN HR Solution Limited provides end-to-end human resource solutions, including workforce supply, payroll management, and statutory compliance.

Core Services

Target Customers

The company serves:

• Manufacturing units

• Logistics & warehousing firms

• Infrastructure contractors

• Healthcare providers

• Service sector enterprises

Position in Value Chain

PAN HR Solution operates as a middle-layer service integrator between workforce supply and client business needs.

Value Chain Position:

Labour Pool → PAN HR Solution → Corporate Clients → End Customers

This positioning allows the company to benefit from both workforce demand and regulatory outsourcing.

The company operates under a strict legal and compliance framework governed by Indian labor laws and corporate regulations.

Major Applicable Laws

Compliance Strength

• Dedicated compliance officer

• Regular statutory filings

• PF & ESI registrations

• GST registration

• Labour license approvals

Strong compliance capability builds trust with corporate clients and reduces legal risks.

PAN HR Solution faces multiple operational and financial risks typical to the HR services industry.

Key Risk Categories

Major Risk Factors

• High dependence on a few large customers

• Labour compliance penalties

• Cash flow mismatches between salary payments and client receipts

• Exposure to minimum wage changes

• Attrition of skilled management

However, diversified client base and compliance systems partially mitigate these risks.

The company is promoted by:

Promoters

Background

The promoters bring experience in:

• Human resource management

• Workforce outsourcing

• Business development

• Compliance handling

They have played a critical role in scaling operations and preparing the company for public listing.

PAN HR Solution Limited has group entities and related companies that engage in business activities connected to staffing and manpower services.

Relationship Overview

These entities support:

• Manpower sourcing

• Administrative services

• Operational support

All related party transactions are disclosed and carried out at arm’s length as per statutory norms.

PAN HR Solution Limited is led by an experienced management team with strong domain expertise in human resource services, compliance management, and business operations. The leadership focuses on operational excellence, statutory compliance, and long-term scalability.

Board of Directors & Key Management Personnel (KMP)

Management Strengths

• Experience in manpower outsourcing and HR compliance

• Knowledge of Indian labor laws and statutory requirements

• Hands-on operational leadership

• Focus on ethical governance and transparency

The leadership team ensures efficient deployment of workforce solutions while maintaining regulatory discipline.

PAN HR Solution Limited follows a structured corporate governance framework aligned with the Companies Act, 2013 and SEBI ICDR Regulations.

Board Structure

Key Board Committees

Governance Practices

• Regular board meetings

• Internal audit mechanism

• Whistle-blower policy

• Code of conduct for directors and employees

• Transparent disclosures

Strong governance builds investor confidence and ensures long-term sustainability.

The company and its promoters are subject to routine legal and regulatory proceedings that arise in the normal course of business, mainly related to labor laws and commercial matters.

Litigation Overview

Impact Assessment

• No litigation materially threatens business continuity

• Provisions made where required

• Legal matters are disclosed as per SEBI materiality policy

The company maintains a legal compliance framework to monitor and resolve disputes efficiently.

PAN HR Solution Limited operates under multiple statutory registrations and licenses to conduct manpower and HR services legally in India.

Key Licenses & Approvals

These approvals enable the company to:

• Employ and manage workforce legally

• Deduct and deposit statutory contributions

• Conduct business across states

• Enter into corporate contracts

*EBITDA calculated as:
PBT + Depreciation & Amortization + Finance Cost
(from Notes 21 & 22 in RHP)

Balance Sheet Snapshot (₹ in Lakhs) – As at 31 March 2025

The company uses borrowings mainly to meet working capital requirements such as salary payments and operational expenses.

Borrowing Profile

Key Observations

• Borrowings are primarily short-term

• No long-term heavy debt burden

• Financial obligations are serviced from operating cash flows

• No default history reported

The conservative borrowing structure reduces financial risk and interest burden.

The cash flow profile reflects the company’s business nature where operating cash inflows arise from client billing and outflows relate mainly to salary and statutory payments.

Cash Flow Summary (₹ in Lakhs)

Cash Flow Insights

• Operating Cash Flow: Positive, driven by client collections

• Investing Cash Flow: Limited, mainly office equipment and systems

• Financing Cash Flow: Borrowings and repayments

The company maintains sufficient liquidity to meet salary obligations and operational needs.

Financial ratios help investors evaluate the company’s profitability, liquidity, solvency, and return efficiency. These ratios are derived from the company’s restated financial statements and reflect its operational health.

Key Profitability Ratios

Liquidity & Solvency Ratios

Observations

• The company maintains moderate leverage due to working capital nature of business

• Liquidity ratios reflect its ability to meet salary and statutory payments

• Profitability ratios are linked closely to scale of manpower deployment

Overall, the ratios indicate a stable financial structure with scope for margin improvement through operational scale and automation.

Management believes that PAN HR Solution Limited is well positioned to benefit from India’s expanding formal employment and outsourcing ecosystem.

Key Performance Drivers

• Increase in number of deployed workforce

• Expansion of client base across industries

• Strong statutory compliance capabilities

• Long-term contracts with corporate customers

Key Challenges Identified by Management

Growth Strategy

Management’s strategy emphasizes sustainable growth through operational discipline, compliance strength, and client trust.

The company proposes to utilize the proceeds from the Fresh Issue for strengthening its operational and financial base.

Objects of the Issue

Rationale

• HR services business requires continuous cash flow for salary disbursement

• IPO funds will reduce dependence on bank borrowings

• Improved balance sheet strength

• Support future growth plans

The IPO is therefore aimed at improving liquidity, operational capacity, and long-term financial stability.

The issue price of the IPO is determined using a combination of financial performance and market benchmarks.

Valuation Considerations

Parameter Basis

Earnings Per Share (EPS) Based on recent financial year

Price-to-Earnings (P/E) Compared with peer HR services companies

Net Asset Value (NAV) Derived from net worth

Growth Prospects Industry outlook and expansion plans

Market Conditions Investor demand and SME valuations

Valuation Philosophy

• Balanced approach between growth and profitability

• SME platform valuation benchmarks considered

• Reflects company’s operational scale and future outlook

The pricing aims to be fair for both existing shareholders and new investors.

The company’s share capital structure changes as a result of the IPO.

Pre-Issue Share Capital

Post-Issue Share Capital

The IPO introduces public ownership while promoters continue to retain management control.

After completion of the IPO, the shareholding will be distributed among promoters, public investors, and market maker.

Indicative Post-Issue Shareholding Pattern

Benefits of Diversified Ownership

• Improves corporate transparency

• Enhances liquidity in secondary market

• Broadens investor base

• Strengthens governance discipline

The diversified shareholding structure aligns with SEBI norms and SME listing requirements.

PAN HR Solution Limited follows a balanced dividend policy aimed at rewarding shareholders while retaining earnings for growth.

Dividend Philosophy

Key Factors Considered Before Declaring Dividend

• Profitability of the company

• Working capital needs

• Future expansion plans

• Cash flow position

• Regulatory restrictions

The company intends to strike a balance between distributing profits and reinvesting for long-term sustainability.

Investors should consider the tax implications under the Income Tax Act, 1961, while subscribing to and trading in the equity shares of PAN HR Solution Limited.

Capital Gains Tax on Sale of Shares

Dividend Taxation

Other Tax Aspects

• Securities Transaction Tax (STT) applicable on sale

• Non-resident investors subject to FEMA and DTAA provisions

• Capital loss can be set off as per tax rules

Investors are advised to consult tax professionals before investing.

The company has entered into certain related party transactions in the ordinary course of business with promoters and group entities.

Nature of Transactions

Governance of Related Party Transactions

• Approved by Audit Committee

• Conducted at arm’s length

• Disclosed in financial statements

• Compliant with Companies Act & SEBI norms

These transactions are monitored to prevent conflicts of interest.

The company has entered into several important agreements related to the IPO and its operations.

Major Agreements

These contracts ensure smooth conduct of the public issue and protect investor interests.

The IPO consists of a combination of Fresh Issue and Offer for Sale through the book-building route.

Issue Structure

Reservation Structure

This allocation follows SEBI ICDR Regulations for SME IPOs.

Equity shareholders enjoy statutory and corporate rights.

Shareholder Rights

These rights are governed by the Companies Act and Articles of Association.

The company has made all disclosures required under SEBI ICDR Regulations and Companies Act.

Key Disclosures

The company confirms:

• No misleading statements

• Full transparency

• Compliance with regulatory requirements