Affle India which is an Indian arm of global technology company Affle has opened its public issue for subscription.
Here is a lowdown on the offer and whether you should take a plunge in it or not:
1. Issue details: Affle (India) plans to raise up to Rs 459 crore via the public issue i.e. a mix of fresh share sale of Rs. 90 crore while the OFS is by promoters of Rs. 367-369 crore. The price band had been decided at Rs 740 - 745 apiece. And the money mopped up through the issue will be used towards financing the working capital requirements as well as for other general corporate purposes.
2. Company details: The company is into the technology space has two main segments i.e.the consumer platform and the enterprise platform. It owns platforms such as mobile-audience-as-service (MAAS), mFaaS for mobile ad fraud detection, 'ad2campaign' for mobile marketing, 'Ripple' for cross screen advertising and 'mTraction TVSync' for TV-linked digital advertising, among others.
Also, the company operates in other nations including South East Asia, MENA, Europe, US, Japan, South Korea and Australia. And its other shareholders include Microsoft Global Finance, a subsidiary of Microsoft Corp, which owns 6.23 per cent stake.
3. Financials: The company posted a 31.6% CAGR jump in standalone operating revenue over the financial year period 2015-19 to Rs 117.79 crore in FY19. Top-line growth was primarily aided by 28.6 % CAGR increase in the business from the consumer platform. EBITDA increased 91.3%CAGR over FY15-19 to Rs 24.75 crore. EBITDA margin expanded from 4.7% in FY15 to 21% in FY19. PAT increased 64.9% CAGR during this period to Rs 16.68 crore in FY19..
4. Conclusion: Most of the brokerage houses have give thumbs up to the issue and assigned a Subscribe rating. Considering the IPO price band, the stock is available at a P/E (taking PAT of proforma consolidated financials) multiple of 36.4x-36.7x FY19. So, investors can consider the subscription call with a long term holding perspective.
"Affle India looks promising considering its strong growth in the last three years. Even though the ad tech industry is competitive, Affle outperforms its peers with a higher number of consumer profiles and data points leading to a network moat. Hence, the high valuations justify the listing premiums it deserves," says Umesh Mehta, Head of Research at Samco Securities.