The IndiaMart IPO is seeing decent traction, with the public issue already subscribed over 55 per cent in the early trade of the second day of the offer.
The IndiaMart IPO is seeing decent traction, with the public issue already subscribed over 55 per cent in the early trade of the second day of the offer. The issue has got bids for 26,92,824 shares against the lot size of 48,87,862 shares, NSE data showed. The issue will close on June 26. The price band has been fixed at Rs 970–973 per share for the IPO. The qualified institutional buyers or QIBs and retail investors have subscribed 76 per cent of their quota so far. The non-institutional investors have subscribed to one per cent of their total quota while employees have subscribed to 84 per cent of their quota on the second day of bidding.
IndiaMart InterMesh, operator of the online listing platform- Indiamart.com, is expected to raise around Rs 475 crores through this IPO. The company will not receive any proceeds from the issue. Promoters Dinesh Chandra Agarwal and Brijesh Kumar Agrawal will sell 14,30,109 shares through this issue. The company’s promoters’ holding will decrease to 53 per cent from 58 per cent post this IPO. Other major investors Intel Capital (Mauritius), Amadeus IV DPF and Accion Frontier Inclusion Mauritius will also offload some of their shares through this issue.
On Friday, IndiaMart InterMesh raised at Rs 214 crores by allotting 2,195,038 equity shares around Rs 973 per share to 15 anchor investors, including ICICI Mutual Fund, HDFC Mutual Fund, SBI Mutual Fund, Birla Mutual Fund, SAIF Partners and Malabar India.
IndiaMart InterMesh earns revenues from the sale of subscription packages, request for quote or “RFQ” credits, advertising from IndiaMART desktop, mobile optimised platforms and payment facilitation services. The company had 129,589 paying subscription customers in its three different packages in FY19. It had 82.7 million registered buyers and 5.5 million supplier storefronts in India till FY19. Indian supplier storefronts had listed total 60.7million products. The company reported an aggregate of 723.5 million visits in FY19 out of which mobile traffic constituted 76 per cent of total traffic, Reliance Securities said in a report.
General demand slowdown for the types of products and services listed by the suppliers on IndiaMART online marketplace and higher competitive intensity are the key risks as stated by reliance Securities in its report. IndiaMart reported consistent growth in its revenue over the past three financial years. In FY17, the company’s revenue was Rs 317.8 crore, whereas in FY18 and FY19 it rose to Rs 410.51 crore and Rs 507.42 crore, respectively. It registered a loss of Rs 64 crore in FY17. In FY18, its adjusted profit after tax (PAT) stood at Rs 55 crore, while in FY19, it was Rs 20 crore.