IndiaMART’s $68 Mn IPO Is Oversubscribed 36X Since Monday

While being the first online B2B marketplace for business products and services to float an IPO was not recognition enough for IndiaMART, it added yet another feather to its cap on June 26, the closing day of bids for its IPO, getting oversubscribed by 36 times.

This is one of the highest subscriptions any Indian internet company has got so far while listing on NSE and BSE. In 2013, JustDial’s IPO was oversubscribed 11.63x while Infibeam IPO got oversubscribed by 1.11x in 2016.

The bids for $68 Mn worth IndiaMART IPO began on June 24 at an INR 970 – INR 973 per equity share and the listing will happen on July 4, 2019. IndiaMART has also reserved 10K shares for eligible employees and offering them a discount of INR 97 per share.

The company will sell a total of 1.4 Mn shares in the IPO. Other existing investors such as venture capital investors Intel Capital, Amadeus Capital Partners, and Quona Capital will also be offloading a part of their shares through the IndiaMART IPO.

According to a company statement, Intel Capital will sell 2.07 Mn shares, while Amadeus IV DPF, and Accion Frontier Inclusion Mauritius will be selling 170.5K and 475K equity shares respectively.

Incorporated in 1999 by Brijesh Agrawal and Dinesh Chandra Agarwal, IndiaMART InterMESH Limited is an online B2B marketplace to deal with business products and services. It is an online platform for business buyers to connect with suppliers of the products and services.

As on March 31 2018, the company had 4.72 Mn supplier storefronts with listed 50.13 Mn products and 59.81 Mn registered buyers. The company earns revenue primarily by selling the subscription packages which are available for a month, year and multi-year. In addition, the company also generates revenue by advertising, sale of RFQ credits and payment facilitation service.

It competes with the likes of Tradeindia.com and Alibaba India. Other players include JustDial, Google, Industry Buying, Power2SME, Moglix and Bizongo. Over the last three financial years, the company has shown stability in its financials.

According to Dilip Davda, contributing editor at Chattisgarh.com, an IPO review platform, for the last three fiscals, IndiaMART has on a consolidated basis posted turnover/net profits – (Loss) of INR 331.94 Cr / (INR 64.35) Cr (FY17), INR 429.53 Cr / INR 54.76 Cr (FY18) and INR 548.39 Cr / INR 20.04 Cr (FY19).

“IndiaMART is a first mover in providing a platform for MSMEs as B2B online trading platform and is taking forward Digital India movement in a right spirit. According to a market survey, while an online B2B segment is growing, B2C is also expected to fall in line. Thus IndiaMART being the largest online trading platform provider is set to ripe benefits,” he added.