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IndiaMart's IPO is here; here's all you need to know before you invest 

The equity shares of IndiaMart will be listed on the BSE and the NSE. What do brokerages have to say about the IPO? 

Published: 24th June 2019 05:43 PM  |   Last Updated: 24th June 2019 05:46 PM   |  A+A-

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By Online Desk

IndiaMart InterMesh, the country's largest business-to-business (B2B) marketplace, launched its initial public offering (IPO) on Monday. The IPO will see the sale of 48,87,862 equity shares in a fixed price band of Rs 970-973 per share.

At the upper end of the price brand, the Noida-based firm aims to raise Rs 475 crore. The IPO, which is entirely an offer of sale (OFS), will close on Wednesday,  June 26.

The company will not get any proceeds from the issue since it is an OFS by its promoters and investors.

On Friday, a day before the issue opened, the company raised over Rs 213 crore from 15 anchor investors by allotting 21,95,038 equity shares at a price of Rs 973, the upper price band. Anchor investors are institutional investors who are offered shares in an IPO a day before the offer opens. They are required to invest a minimum of Rs 10 crore in the issue.

Mutual fund companies such as ICICI Mutual Fund, HDFC Mutual Fund, SBI Mutual Fund are among the 15 anchor investors.

The equity shares of IndiaMart will be listed on the BSE and the NSE. ICICI Securities, Edelweiss Financial Services and Jefferies are managing the Indiamart initial share sale.

IndiaMart will be the first company to launch an IPO after Modi won again. According to primary market tracker Prime Database, the first five-year-term of Prime Minister Modi witnessed 118 IPOs, which are said to have raised Rs 1.44 trillion from investors.

IndiaMart has recorded consistent growth in its revenue over the past three financial years. In FY17, the company’s revenue was  Rs 317.8 crore, while in FY18 and FY19 it recorded a growth - clocking Rs 410.51 crore and Rs 507.42 crore, respectively.

The company claims to sell over 65 million products, and to cater to more than 58 million buyers and over 4.6 million suppliers.

What do brokerages have to say about the IPO? 

Angel Broking gave a 'Neutral' rating on the Public issue. The brokerage advises the investors to wait for price discovery before planning to invest.

Choice Broking has given a 'Subscribe' rating to the issue. "Considering the growth outlook coupled with a dominant market position and expected benefit from the operating leverage, we feel that the future benefits outweigh the target share price derived from various traditional valuation multiples. Such type of technological and scalable business model companies should not be valued merely on the profitability but also on the future market potential and the capabilities of the management to work towards achieving the potential," they said in a research note.

Geojit is 'Neutral' on the IPO. "Given the lack of comparable peer's analysis, the situation for investors remain unclarified. But the company should be considered in the long term, given the sustainability of its profitability due to strong market share, healthy balance sheet, rich in cash, nil debt and healthy RoA," the brokerage said in a note. 

Canara Securities has a 'subscribe' rating on the issue. "IndiaMart has a robust two-way business model and derives subscription-based revenue from paid suppliers. We believe that the company is well positioned in the growing B2B digital platform business with a unique business model and strong client base. One may subscribe for listing gains," the brokerage said in a note.



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