Next Orbit Ventures Pumped In $17.2 Mn In Infibeam’s IPO For A 5% Stake

Next Orbit Ventures Pumped In $17.2 Mn In Infibeam’s IPO For A 5% Stake

Infibeam’s IPO had a slow start but was later oversubscribed at 1.11 times,  and saw a maximum chunk of investment come from Mumbai-based venture capital firm, Next Orbit Ventures.

As per ET reports, Next Orbit Ventures invested about INR115 Cr ($17.2 Mn), picking up a stake of 5% in the ecommerce firm. The investment has been made from $140 Mn (INR700 Cr) fund constituted by the firm.

Ajay Jalan, founder & MD, Next Orbit Ventures stated, “When other online-retail companies in the market are making losses, we are very confident about our investment on a company which is ready to IPO and will be making profits in next 6 months.”

Though Infibeam raised close to INR450 Cr in its IPO, earning the distinction of the first Indian ecommerce firm to do so, it was hardly without smooth sailing. The first hitch was the exit of two investment banks- Kotak Mahindra and ICICI bank- from the IPO over apparent disagreement with the company on the valuation and pricing of the offer and the timing of the launch, given the lull in the ecommerce sector.

Secondly, the IPO was also rated as risky by many brokerages, who mostly advised investors to avoid the issue on account of the downturn in the ecommerce sector, with marked down valuations and funding drying up in the sector. This raised serious questions over Infibeam’s  expensive issue and whether it would be able to post profits like it has done in the first half of FY 2016. Infibeam reported losses for four consecutive financial years ending FY 2015, but turned profitable in the first half of FY 2016. In the first half of FY 2016, it reported a profit of INR 6.22 CR on revenue of INR 171.27 Cr.

Issues were also raised on its unproven track record of profitability, its smaller scale of operations as compared to other players, absence of funding, intense competition in the ecommerce sector, and lack of the customer mindshare that the other larger players like Flipkart have garnered.

Inspite of these hurdles, however, the IPO which was undersubscribed at a measly 21% on the opening day, later rose to 63% subscription level on the second day. And finally closed at 1.11 times, receiving bids for 1,38,30,894 shares against the total issue size of 1,25,00,000 shares. Given the size of Next Orbit’s investment, it seems it had a big role to play, as the amount invested is almost 25.5% of the total proceeds raised.

Infibeam plans to use INR 235 Cr out of the IPO proceeds to set up a cloud data centre and purchase property to shift the registered and corporate office(Ahmedabad). It also wants to use INR 67 Cr to purchase software and INR 38 Cr for setting up 75 logistics centres. The IPO will also add to the INR 70 Cr worth cash it already has on its books.

Meanwhile, Next Orbit’s investment comes from its first fund, which has largely been used in making sector-agnostic investments in consumer products & services and internet & technology support services. The second fund, launched in November, called the ‘$750 Mn dollar Fund II’ totalling $750 Mn (INR 4875 Cr.), will be used to invest in semiconductor fabrication (fab), fab science park, solar and LED fab, IoT, healthcare and other Electronic System and Design Manufacturing (ESDM) products.


Welcome to Flash Feed, your essential source for breaking news and innovation from around the web – bite-sized and updated all day.


You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Next Orbit Ventures Pumped In $17.2 Mn In Infibeam’s IPO For A 5% Stake-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Next Orbit Ventures Pumped In $17.2 Mn In Infibeam’s IPO For A 5% Stake-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Next Orbit Ventures Pumped In $17.2 Mn In Infibeam’s IPO For A 5% Stake-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Next Orbit Ventures Pumped In $17.2 Mn In Infibeam’s IPO For A 5% Stake-Inc42 Media
Next Orbit Ventures Pumped In $17.2 Mn In Infibeam’s IPO For A 5% Stake-Inc42 Media
You’re in Good company