Unicommerce IPO: Issue Fully Subscribed On Day 1

SUMMARY

Unicommerce’s IPO received cumulative bids for 3,42,62,364 (3.42 Cr) as against an offering of 1,40,84,681 (1.4 Cr) shares

While retail investors oversubscribed their quota by 9.98X, NIIs placed bids for 86.87 Lakh as against 38.41 Lakh shares reserved for them

The startup is intending to raise INR 276.5 Cr through this IPO at the upper price band

The initial public offering (IPO) of SaaS startup Unicommerce has raked in a strong response from investors on the first day of the bidding, getting fully subscribed 2.43 times.

The IPO received cumulative bids for 3,42,62,364 (3.42 Cr) as against an offering of 1,40,84,681 (1.4 Cr) shares.

Of all the segments, most of the subscriptions came from retail individual investors who bid for 2,55 Cr shares as against 25.6 Lakh shares reserved for them. This resulted in an oversubscription of 9.98X.

Closely trailing on RII were bids for non-institutional investors(NIIS) at 2.26X oversubscription. The NIIS placed bids for 86.87 Lakh as against 38.41 Lakh shares on offer.

Meanwhile, the portion reserved for the qualified institutional buyers (QIBs) received the most lukewarm response with only 21.25K shares subscribed against an offering of 76.82 Lakh reserved shares.

Notably, Unicommerce raised INR 124.4 Cr from 14 anchor investors ahead of its IPO opening today.

After the IPO subscription, Unicommerce’s shares will be listed on the stock exchanges like BSE and NSE. The startup is intending to raise INR 276.5 Cr through this IPO at the upper price band. The price band set was set at INR 102-108 per equity share.

The IPO only comprised an Offer for the sale of 2.56 Cr Shares. Under the OFS, AceVector Ltd (formerly Snapdeal) and SoftBank will be selling up to 94.38 Lakh equity shares and up to 1.61 Cr equity shares respectively.

Founded in 2012, Unicommerce is an ecommerce SaaS startup that helps businesses manage inventory across all online marketplaces. In its RHP, the startup also claimed to be the largest ecommerce enablement SaaS platform in transaction processing in terms of revenue in FY21, FY22, and FY23. Increff, Vinculum, Browntape, and Easyecom are among the other players that it competes with.

The startup’s move towards the public market comes at a time when its financial health is becoming healthier. For the financial year 2023-24 (FY24), Unicommerce’s net profit more than doubled to INR 13.1 Cr from INR 6.5 Cr reported in the previous year.

It saw its operating revenue jumping 15% to INR 103.58 Cr during the fiscal as against INR 90.06 Cr in FY23. Meanwhile, its total expenses also rose over 9% to INR 91.9 Cr in FY24 from INR 84.1 Cr in the previous fiscal year.

Broking houses BP Wealth gave a subscribe rating for the issue. It cited the reason as, “On the upper price band, the issue is valued at a P/E of 93.1 x based on FY24 earnings. Though the issue looks rich in terms of valuation, we believe that the company’s strong business performance along with industry tailwinds provide an opportunity from a medium to long-term perspective.”

Highlighting its outlook on the IPO, another stockbroker Swastika added, “While Unicommerce benefits from a strong market position and upselling/cross-selling opportunities, it faces competitive pressures, negative cash flows, and operational dependencies on third-party service providers. Additionally, the company’s business is subject to seasonal fluctuations.”

Given these factors, Swastik recommends a cautious approach and suggests that only well-informed investors consider this IPO for potential listing gains.