IndiaMART shares make strong market debut, close at 34% premium
MUMBAI: Mumbai: Shares of IndiaMART InterMESH Ltd closed at a near 34% premium on Thursday, against its issue price of₹973, which was the upper end of the company’s public offer price band of ₹970-973 per share.
The business-to-business (B2B) online platform’s ₹475 crore initial public offer (IPO) was subscribed 36.16 times last week.
IndiaMART InterMESH shares opened at ₹1,180 apiece on the BSE and touched a high of ₹1,339, or up 37.6% from the issue price.
The stock settled at ₹1,302.55 on the BSE, up 33.87%. India’s benchmark Sensex rose 0.17% to 39908.06 points.
The initial public offer (IPO) of IndiaMART, which operates Indiamart.com, opened on 24 June and closed on 26 June.
The initial public offer saw three of the company’s private equity and venture capital investors, including Intel Capital, Amadeus Capital Partners, and Quona Capital, partially exit, according to the draft red herring prospectus (DRHP) of the company.
ICICI Securities, Edelweiss Financial Services and Jefferies managed the initial share sale of IndiaMART.
IndiaMART’s online marketplace provides buyers and sellers a platform to discover products and services.
As on 31 March 2018, the company had 59.81 million registered buyers and 4.72 million suppliers.
The suppliers had listed 50.13 million items, of which 75% consisted of products, while the rest was services, according to the DRHP.
The company reported adjusted consolidated net profit of₹85.30 crore in 2018-19, down 52% from a year ago, while total income for the fiscal year was ₹507.40 crore, up 23.6% from the same period a year ago.
Earnings before interest, taxes, depreciation, and amortization (Ebitda) stood at ₹82.30 crore, up 76.6%.
The company has zero debt and ₹685 crore cash as on 31 March.
“We feel IndiaMart can sustain higher growth and higher growth in revenue will help it to improve margins on account of operating leverage. IndiaMart is focused on B2B and enjoys a dominant position in India,” said brokerage Nirmal Bang, in a 24 June note.
“We feel the B2B segment is more specialized and has not attracted any major competition from other large marketplaces, such as Amazon, Flipkart, and even search engines like Google. IndiaMart enjoys pricing power and the card rate for paid services has increased in last few years,” the report added.
“With high internet penetration and IndiaMart’s presence in different verticals and geography, we believe IndiaMart will be able to capture the rising opportunity in the industry. Being an e-commerce company, investment is majorly into the platform, which is already built, so the company cost would not grow in comparison to sales, leading to improvement in the profitability,” the report said.