E-commerce player Infibeam’s new share sale turned out to be a reasonably good one, suggesting investors are willing to bet on the internet and e-commerce space. The Gujarat-based firm’s initial public offering (IPO) went through on Wednesday with the subscription coming in at 1.1 times. The issue, which had seen lukewarm response earlier in the week, elicited good response from investors on the last day with bids coming in for 138 lakh shares of the total 125 lakh shares on offer.
In the year to March 2015, Infibeam reported a total income of Rs 295.2 crore and a loss of Rs 9.8 crore, which was lower than the loss in the previous year of Rs 26.9 crore. In the six months to September 2015, however, it reported a profit of Rs 6.2 crore on revenues of Rs 174. 6 crore.
Interestingly, wholesale investors stayed cautious — the quota for qualified institutional buyers was subscribed just 0.8 times with 80 lakh shares of the 93 lakh shares reserved being bid for. However, the response from high net worth individuals was overwhelming with the quota being subscribed 2.23 times and 41 lakh shares of the 18 lakh shares on offer bid for. Moreover, the response from retail investors too was enthusiastic and the quota was subscribed 1.3 times — investors bid for 16 lakh shares of the 12 lakh shares on offer.
The company is looking to raise Rs 450 crore through the public offer in a price band of Rs 360-432 per share and will use the proceeds to set up a cloud data centre and 75 logistics centres, and to buy software. ICICI Securities and Kotak Mahindra Capital had opted out of the IPO reportedly because they were not convinced about the pricing, valuations and timing of the issue, leaving SBI Capital Markets and Elara Capital India to be the book-running lead managers.
The company runs several e-commerce services like Infibeam.com, BuildaBazaar, Incept and Picsquare. Infibeam BuildaBazaar is an e-commerce marketplace that provides cloud-based, modular and customisable digital solutions and other value-added services to enable merchants to set up online storefronts.
The firm’s customers include Unitech Amusement Parks, Panasonic India, Crossword Bookstores, Spice Retail, Adlabs Entertainment, Gulf Oil Lubricants, Hidesign, Axiom Telecom and Mumbai International Airport.
Infibeam had filed its draft prospectus with Sebi before the markets regulator announced the institutional trading platform (ITP). However, the company decided to list on the main stock exchanges although it did have a choice to subsequently migrate to the ITP. FE