IndiaMART IPO

IPO of IndiaMART InterMESH Limited

Introduction:-  IndiaMART InterMESH Ltd. is an Indian e-commerce company that provides B2C, B2B and customer to customer sales services via its web portal. The group began in 1996 when Dinesh Agarwal and Brijesh Agrawal founded the website IndiaMART.com, a business-to-business portal to connect Indian manufacturers with buyers. The company is headquartered in Noida, India.

In 2014, IndiaMART's portal handled 200 crore in revenue and 20,000 crore in sales. According to a news in Economic Times, as of 2012 IndiaMART was India's largest online marketplace and world's second-largest B2B marketplace after Alibaba. IndiaMART's e-commerce portal Tolexo was launched in 2014.

IndiaMART is India’s largest online B2B marketplace, connecting buyers with suppliers. With 60% market share of the online B2B Classified space in India, the channel focuses on providing a platform to Small & Medium Enterprises (SMEs), Large Enterprises as well as individuals. Founded in 1999, the company’s mission is ‘to make doing business easy’.

IndiaMART for Buyers

– Convenience of connecting with sellers anytime, anywhere
– Wider marketplace with a range of products and suppliers
– Payment Protection Program.

IndiaMART for Suppliers

– Enhanced business visibility
– 72.52 million daily unique buyer requests
– Increased credibility for your brand
– Lead Management System
– Instant payment gateway, Pay with IndiaMART

IndiaMART has 2,915 employees located across 72 offices in the country.

The existing investors of IndiaMART include Intel Capital, Amadeus Capital, WestBridge Capital & Quona Capital and Accion Frontier Inclusion Mauritius.

Top Board members:-

- Dinesh Chandra Agarwal (Managing Director, IndiaMART)

- Brijesh Kumar Agrawal (Whole-time Director, IndiaMART)

- Dhruv Prakash  (Non-Executive Director, IndiaMART)

- Elizabeth Lucy Chapman (Non-Executive Independent Director, IndiaMART)

- Rajesh Sawhney (Non-Executive Independent Director, IndiaMART)

- Vivek Narayan Gour (Non-Executive Independent Director, IndiaMART)

IndiaMart IPO opens: Key things to know before you invest

• At the upper end of the price band, IndiaMart offer is expected to raise about ₹475 crore.
• The issue would close on June 26. 
• Price band:- ₹970–973 per share for the IPO, which consists of sale of up to 48,87,862 equity shares.
• Post the IPO, IndiaMart’s promoters holding will fall to 53%, from 58% earlier.
• Other big investors will also offload some of their holdings through this issue.
• ICICI Securities, Edelweiss Financial Services and Jefferies India are the book running lead manager to the offer.
• The lot size or minimum order quantity is 15 shares or and in multiples thereafter.

Retail allotment

The maximum number of retail individual investors who can be allotted the minimum bid lot is computed by dividing the total number of equity shares available for allotment to retail individual investors by the minimum bid lot, according to the IndiaMart’s offer document. 10% of the net offer, or 487,786 equity shares, is available for allocation to retail individual investors. Under the retail category, investors can invest up to₹2 lakh in IndiaMart IPO.

IndiaMart - Company profile and financials

As of March 31, 2018, IndiaMart had 59.81 million registered buyers. According to KPMG, the growth in internet penetration across India is helping companies move their businesses online and reach out to a larger customer base.

IndiaMart earns revenue primarily through the sale of subscription packages (available on a monthly, annual and multiyear basis) to suppliers. It also earns revenue through advertising on its desktop, mobile and app platforms. IndiaMart’s revenue registered a 29% CAGR over FY2014-19 to₹507 crore while it reported a net profit of ₹20 crore in FY19, according to a note from Angel Broking. Number of paid subscription suppliers grew at a healthy CAGR of 21% over FY2016-19 to 1,30,000 and the company is well diversified across industries and geographies and categories, the note added.

What brokerage houses say

Angel Broking has a “neutral" rating on the issue, citing valuation as well as increasing competition intensity in the space. “At the upper end of the price band, IndiaMart demands PE multiple of 33x of FY19 EPS," the brokerage said in a note.

Apart from the presence of a large player like Google, “over the last 4-5 years, a couple of new ventures have come up in the online marketplace space like Ninjacart (connects farmers to retailers), Power2SME (an online wholesale raw material buying platform for SMEs) and recently entered Udan. We believe IndiaMart will face competition in the respective fields where these have presence," the brokerage said in a note.

Canara Securities has a 'subscribe' rating on the issue. "IndiaMart has robust two-way business model and derives subscription based revenue from paid suppliers. We believe that the company is well positioned in the growing B2B digital platform business with unique business model and strong client base. One may subscribe for listing gains," the brokerage said in a note.