Route Mobile IPO, brokers focus tech improvement, and more
Mumbai: Route Mobile, an omnichannel cloud communication service provider, on Friday announced its Rs 600 crore initial public offer will hit the primary market on Wednesday, September 9. The company has set the price band for the issue at Rs 345-Rs 350 per share.
The issue would include a fresh issue of up to Rs 240 crore. Besides, current promoters would offer shares aggregating up to Rs 360 crore in an offer for sale (OFS).
This involves shares worth up to Rs 180 crore by Sandipkumar Gupta and up to Rs 180 crore by Rajdipkumar Gupta.
The money raised through the issue of fresh shares will be used for the subsequent proceeds
- For the repayment or pre-payment
- Acquisition of assets
- Additional strategic actions
- Purchasing of office premises in Mumbai
Process for IPO Application
Proposed investors can invest in IPO through their broker account electronically or by a medium via ASBA (Applications Supported by Blocked Amount) via the NetBanking facility of a registered bank account.
Investors can bid for a minimum bid lot of 40 shares and in multiples of 40 shares hereafter. The issue opens on September 9 and will conclude on September 11.
Company Administration and its business model
Incorporated in 2004, the company has served more than 30,150 clients since its inception on June 30.
The business deals happened in the three verticals — i.e
- Mobile Operator
- Business Process Outsourcing.
It has global customers across Africa, Asia Pacific, Europe, the Middle East, and North America.
Financial Performance Report
The company’s profit rose at Rs 79.60 crore in FY20 against Rs 74.8 crore in FY19 and Rs 58.10 crore in FY18. Return on equity (RoE) reached 30 % for FY20 against 36 % each in FY19 and FY18.
In terms of PAT margins, the firm recorded a margin of 8 % in FY20, down from 9 % in FY19 and 11 % in FY18. Cumulative billable transactions for the company rose 38 % compounded annually, the company stated in its presentation.
The company possesses a total of 291 employees (including the ones in subsidiaries). Besides, it has 27 employees serving outside India. It was placed 2nd globally as a tier 1 application-to-peer service provider and 1st for value-added services amongst tier 1 venders as per the A2P SMS Messaging Vendor Performance Report 2017
Bidding via anchor investors shall be offered, and allotment to them will be closed, on September 8, 2020, being one working day heading over the Initial Public Offer (IPO) opening date, the firm stated.
Fund managers of the Route Mobile issue
ICICI Securities, Axis Capital, Edelweiss Financial Services, and IDBI Capital Markets & Securities have been appointed as the book running lead managers to the offer. Karvy Technologies Private is acting as the registrar to the offer. IPO registers on BSE and NSE index
Outlook and Valuation
- Route Mobile is a company with differentiated cloud communication services and has no listed peers in India.
- The cloud communication platform is required in every indian organization and business verticals to maintain its business operations and continuity.
- Cloud communications platforms are bringing revolution in areas about how businesses can communicate with customers, subscribers, and end users and thus has a long runway for growth.
- Based on its NAV of INR 59.40, the issue is priced at a P/B of 5.9 as on June 30, 2020, which appears to be reasonable.
Hence, looking at its consistently healthy financial performance and lucrative future growth prospects, we advise the investors to subscribe to this IPO.
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