Matrimony.com, a company into the business of online matchmaking and other marriage related services, shall be the first company in its segment to list on the exchanges after the public issue. The IPO issue is set to open on September 11,2017 and close on September 13, 2017.
Here's a take on whether you should invest in the IPO or not? And if at all then on what grounds you will be able to benefit from the issue.
1. Company's line of business: Matrimony.com is into a unique service arena with not many competitors. It offers online matchmaking facility to its customer's base in India along with the Indian community via their online and offline platform. Several brands including EliteMatrimony.com, BharatMatrimony and CommunityMatrimony.com are its part.
The company via its other sites MatrimonyDirectory.com, MatrimonyPhotography.com, MatrimonyBazaar.com and MatrimonyMandaps.com provides marriage related services that include directory services, photography & videography, catering, apparel, decoration, venue booking etc.
2. Issue details: The company aims to raise Rs 500 crore from the issue that includes issue of fresh shares of up to Rs. 130 crore as well as an offer for sale of 37,67,254 equity shares.
The issue also comes with a reservation of upto Rs. 50 lakh shares for eligible employees of the company. The price band of the issue is Rs. 983-Rs. 985 per share. From anchor investors, the company has already raised Rs. 225.88 crores of shares.
3. Objective: The mopped up amount from fresh share issue shall be used to advertising and promotion activities together with purchase and construction of company's facility at Chennai. Still other amount shall be used to make overdraft payments and other general corporate purposes.
4. Financials and Valuation: The company's EBIDTA for the quarter ended June of FY 18 stood at Rs.12.23 crores while its margin remained at 13.36%. With no listed peers on the exchange, PE of 48.2-48.3 is computed on the basis of price band of Rs. 983-985. Company has a negative net worth from past 4 years time.
5. Conclusion: While most of the brokerage houses are giving thumbs up to the issue due to its unique business. Still there are points of concern with the issue due to its weak financials that started to show some strength only last fiscal. Motilal Oswal on the back of its leadership position in its line of business, lesser competition and expected recovery in earnings has opined that company deserves a premium multiple and has given a Subscribe rating to the issue.