The mobile technology firm is all set to come up with its IPO on Wednesday (September 9, 2020) and after stellar subscription for Happiest Minds Technologies, this issue is also commanding a high premium in the grey market.
Also, the firm with not much impact due to Covid 19 is set to remain strong and indeed commands a strong potential.
Here's is a low down on the different details of the issue so that you can go ahead with your decision on the offer:
1. IPO details:
The Rs. 600 crore IPO from cloud computing business will include a fresh issue of up to Rs. 240 crore and an offer for sale of up to Rs 360 crore by promoters. Promoters Sandipkumar Gupta, Non-Executive Director, and Rajdipkumar Gupta, Managing Director are going to sell Rs 180 crore worth of shares each via offer for sale.
Price band for the issue has been fixed at Rs. 345-350 shares apiece. And the bid can be made for a minimum 40 shares and in multiples of 40 shares thereafter.
The issue will close on September 11, 2020 and is most likely to list on September 21, 2020.
2. Issue objective:
The company will use the proceeds for repaying or prepaying certain loans, fund acquisitions as well as other strategic investments
3. Company details:
Established in the year 2014, the company caters to enterprises, OTT players and mobile network operators. Its portfolio comprises solutions in application-to-peer (A2P) / peer-to-application (P2A) / 2Way Messaging, RCS, OTT business messaging, voice, email, and omni-channel communication.
The company's clientele spans 18 locations across Africa, Asia Pacific, Europe, Middle East and North America.
1. Financials :
For the quarter ended June 2020, profit stood at Rs 26.93 crore on revenue of Rs 309.6 crore and EBITDA at Rs 40.3 crore with margin at 12.90 percent.
4. Promoter shareholding:
After the IPO, promoter shareholding will get reduced to 66% from 96% currently.
5. Should You Subscribe to the issue of Route Mobile IPO:
With no listed peers on the Indian stock exchanges and immense potential in the mobile market space, the subscription to Route Mobile could be a good bet for short to long term for high-risk investors. Also investors subscribing to the issue can expect listing gains.
"Peers like Tata Communications and Tanla Solutions are the proxy peers and have small presence in the services offered by Route Mobile. Most of its international peers are loss making. At the higher price band, the demanded P/E valuation is 28.8x, which we believe is attractive for a company engaged in mobile technology services," said Choice Broking in its report.
"A2P messaging services are most widely used by the enterprise and post-COVID world, migration to digital world will accelerate. Route Mobile has certain business moat like scale, collaboration with MNOs etc., which may act as an entry barrier for a new player," the brokerage added.