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Grey Market Premiums Suggest 2X Returns For MapmyIndia IPO Investors

Grey Market Premiums Suggest 2X Returns For MapmyIndia IPO Investors

The price band for the IPO was INR 1,000 - INR 1,033

At the upper price band, the offer attracted bids worth INR 1.12 Lakh Cr

Going by the grey market premium of the startup’s shares, investors may witness nearly two-fold returns on the listing day

The initial public offering (IPO) of C.E. Info Systems, the parent company of digital mapping startup MapmyIndia which closed on Monday (December 13th, 2021), was subscribed 154.71 times, with strong investor interest across categories.

Shares of MapmyIndia, which are likely to get listed on December 21st, 2021, command a premium of INR 950 – INR 1,000 per share. The price band for the IPO was INR 1,000 – INR 1,033.

As per the grey market premium of the startup’s shares, investors may witness nearly two-fold returns on the listing day.

MapmyIndia’s profitability has been a major factor for the robust investor interest.

Manan Doshi, cofounder, Unlisted Arena said, “Market is enthusiastic about new-age companies which are making profits and MapmyIndia fulfills both the criteria.”

Further, the lack of competition in the digital mapping segment in India and growth prospects also augur well for the company.

“All the upcoming startups in the delivery space and other tech companies will be using mapping technologies and lack of competition presents a large market for MapmyIndia,” he said.

At INR 1,033 a share, the upper limit of the IPO price band, the offer attracted bids worth INR 1.12 Lakh Cr till the offer closed at 5 p.m. on Monday (December 13th, 2021).

The startup had raised INR 311.88 Cr from anchor investors by allotting 30,19,183 shares at INR 1,033 per share. Foreign portfolio investors including Fidelity, Nomura, Goldman Sachs, Morgan Stanley, Aberdeen, HSBC and White Oak invested in MapmyIndia’s anchor round.

Further, the domestic mutual funds which participated included SBI, HDFC, ICICI Prudential, Aditya Birla Sun Life, Tata and Sundaram.

The IPO opened on December 9th, 2021 and consisted of an offer for sale (OFS) of 10,063,945 shares. 

The major selling shareholders of this IPO included promoter Rashmi Verma, who offloaded up to 4,251,044 shares. US-based technology major Qualcomm sold up to 2,701,407 shares and Zenrin offloaded up to 1,369,961 shares.

Founded in 1995, C.E Info Systems is among the few tech-based profitable companies and got listed. In FY21, it posted a profit of INR 59.4 Cr in FY21, a 157% rise from INR 23.1 Cr profit it posted in FY20. The company’s total income swelled up to INR 192.2 Cr in FY21 from INR 163.4 Cr in FY20.

In the current financial year, for the period of April-September, MapmyIndia reported a net profit of INR 46.7 Cr, 161% higher than INR 17.8 Cr reported during the same period of the last fiscal (FY21).

Indian Startups In The Public Market Arena

The year 2021 has been a roller coaster year for the Indian startup economy with a long list of startups getting listed or announcing plans to get listed. 

Recent listings of new-age tech companies on the domestic exchanges include Nykaa, Fino Payments Bank, Policybazaar and Paytm. 

Lifestyle ecommerce giant Nykaa witnessed a bumper listing with a 79% premium last month. Insurtech unicorn Policybazaar got listed with a premium of 17%.

However, Paytm and Fino Payments Bank were listed at a discount of 9% and 5% respectively.

Traveltech startup RateGain which will be listed on the stock exchanges on Friday (December 16th, 2021), was subscribed 17.41 times.