Shares of IndiaMart InterMesh Ltd listed at a 21% 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 online platform’s Rs475 crore initial public offer (IPO) was subscribed 36.16 times last week.
IndiaMart InterMesh shares opened at ₹1,180 a piece on the BSE. At 10.16 am, it traded 32% higher from its price at₹1284.75. So far today, the stock has touched a high of 33.1%.
The public offer of IndiaMart, which operates Indiamart.com, opened on 24 June and closed on 26 June. The IPO saw three of its private equity and venture capital investors make a part exit from the company. Investors selling shares through the IPO include Intel Capital, Amadeus Capital Partners and Quona Capital, according to the draft red herring prospectus (DRHP) filed by the company.
ICICI Securities, Edelweiss Financial Services and Jefferies managed the Indiamart initial share sale.
Indiamart’s online marketplace provides buyers and sellers a platform to discover products and services. As of 31 March 2018, the company had 59.81 million registered buyers and 4.72 million suppliers. These suppliers had listed 50.13 million products, of which 75% of goods comprised products and 25% were services, according to the DRHP.
The company reported a consolidated adjusted net profit of₹85.30 crore in fiscal 2019, down 52% from a year ago, while total income for the year was ₹507.40 crore, up 23.6% from a year ago. EBITDA was ₹82.30 crore, up 76.6%. The company has a zero debt and ₹77 crore cash on its account as of fiscal 2019.
“Going ahead, we feel IndiaMart can sustain higher growth and the higher growth in revenue will help it to improve margin on account of operating leverage. IndiaMart is focused on B2B and enjoy dominant position in India. We feel B2B segment is more specialized and has not attracted any major competition from other large market place operated like Amazon, Flipkart and even search engine like Google. IndiaMart enjoy pricing power and the card rate for paid services has increased in last few years”, said Nirmal Bang in a 24 June note.
“With high internet penetration, IndiaMart presence in different verticals and geography we believe Indiamart, will be able to capture the rising opportunity in the industry. Being an ecommerce company, investment is majorly into platform which is already build, so going ahead, the company cost would not grow in comparison to sales leading to improvement in the profitability”, the report added.