Route Mobile IPO: After Subscription duration

The IPO, which is being sold at Rs 345-350 per share, is seeking a valuation of 29 times PE on FY20 basis (fully diluted). Analysts are positive on the issue and believe the IPO can offer listing pop as well as long-term gains.
Analysts are positive on the issue and believe the IPO can offer listing pop as well as long-term gains.

Route Mobile Ltd.’s initial public offering (IPO) was fully subscribed on the very first day of bidding as it attracted a large influx of retail investors oversubscribing their portion. The Rs 600-crore issue includes a fresh issue of Rs 240 crore and an Offer For Sale (OFS) of up to Rs 360 crore. It enters the market at a time when liquidity is abundant and IPOs are being welcomed with an overwhelming response, as is evident from the Happiest Minds Technologies issue which was subscribed 151 times. Route Mobile has already managed to collect Rs 180 crore from anchor 15 investors, before the issue opened yesterday.

Route Mobile provides cloud-communication platform as a service to enterprises, over-the-top (OTT) players and mobile network operators (MNOs). Its range of enterprise communication services includes application-to-peer (A2P)/peer-to-application (P2A)/2-Way Messaging, RCS, OTT business messaging, voice, email, and omni-channel communication.
The Rs 600 crore IPO by Route Mobile received 5 times bids so far on Day 3 of the bidding process. As per data available with BSE and NSE, the issue received bids for 6,15,32,960 shares by 11 pm on Friday, which was 5.05 times the total issue size of 1,21,73,912 shares.

The company has no listed peers. The proxy peers, which have a small presence in services offered by Route Mobile, are Tanla Solutions and Tata Communications. Continuous development of omni-channel digital communication offerings and innovative solutions focus on developer community program, service offerings through inorganic opportunities and growing presence in additional markets to serve clients locally augurs well with the company going ahead,” said Ashika Institutional Equities.

Route Mobile is going to use the net fresh issue proceeds for repayment or prepayment of certain borrowings, acquisitions and other strategic initiatives, purchase of office premises in Mumbai and general corporate purposes.

The Rs 600-crore public issue witnessed strong subscription of 73.3 times during September 9-11 as the portion set aside for qualified institutional investors was subscribed 89.76 times, non-institutional investors 192.8 times and that of retail investors 12.66 times on final day. “As expected, Route Mobile received an overwhelming response from all the category of investors. We are positive on the future outlook for the industry as well as the company. We expect good listing,” Keshav Lahoti- Associate Equity Analyst at Angel Broking told in Moneycontrol’s release.

Ahead of the IPO, Route Mobile had raised ₹180 crore from 15 anchor investors, including Goldman Sachs, SBI Life Insurance, and SBI Mutual Fund. Route Mobile offered 1.71 crore shares at a price band of ₹345-350 apiece. According to brokerages, Route Mobile shares are likely to get listed on 21st September. KFintech Pvt Ltd is the registrar of the issue. ICICI Securities, Axis Capital, Edelweiss Financial Services and IDBI Capital Markets & Securities are the managers to the issue.

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