Affle (India) Ltd, the local arm of Singapore-based mobile solutions company Affle Holdings Pte. Ltd, received an astounding response to its initial public offering with high demand across investor categories.
The IPO of 3.37 million shares — excluding the anchor allotment — received demand for nearly 292.15 million shares on third and final day, stock-exchange data showed. The book was subscribed 86.5 times.
This was the best investor turnout in an IPO in more than one-and-a-half years. The Rs 600-crore IPO of Amber Enterprises India Ltd, which makes white goods for global players like Whirlpool and Daikin, was subscribed 165 times in January 2018 while Apollo Micro Systems’ Rs 160-crore IPO was covered 248 times the same month.
As for Affle India’s IPO, qualified institutional buyers bid for 55.30 times the 1.83 million shares reserved for them.
The quota of shares reserved for retail investors was covered nearly 11 times while non-institutional investors such as corporate houses and affluent individuals placed orders for 198 times the shares reserved for them.
Non-institutional investors are typically quiet for the first two days of an IPO, and rush to bid on the final day as they typically borrow money to invest. High net-worth individuals (HNIs) borrow short-term capital from various avenues, barring banks, to fund their IPO applications and deploy only a small fraction of their own capital upfront.
On the grey market, shares of Affle India were quoting at a premium of Rs 200-220 apiece over the price band, two grey market dealers told VCCircle.
The IPO had crossed the one-fourth mark on day one on Monday and picked up pace on the second day on Tuesday with more than 80% subscription.
Affle India is the first multinational company to float an IPO in India in over 12 years. Credit rating firm ICRA Ltd was the last Indian company with a multinational parent to go public, in March 2007. After the IPO, promoter holding in Affle India will drop to about 68.4% from 92.17%.
Last Friday, the company attracted a number of marquee institutional investors such as Scottish investment firm Aberdeen Standard Investments, Franklin Templeton Investment Fund and existing investor Malabar Investments among others as part of its anchor book. In total, Affle raised Rs 206.55 crore ($30 million) by allotting a little over 2.77 million shares to 15 anchor investors. Shares were allotted at the upper end of the Rs 740-745 apiece price band.
The company is seeking a valuation of Rs 1,900 crore ($275 million) from the IPO at the upper end of the price band.
The IPO comprises a fresh sale of shares worth Rs 90 core and a sale of about 4.95 million shares by Affle Holdings. The parent company, which is itself backed by Microsoft and Times Internet, had previously planned to divest 5.5 million shares at the time of filing the IPO documents in July last year. The total IPO size is now Rs 459 crore ($66.5 million).
In May last year, VCCircle exclusively reported that Affle was looking to raise $100-110 million by listing the India unit.
ICICI Securities and Nomura are the merchant bankers managing the Affle India IPO.
The company was founded in 2006 by Anuj Khanna Sohum and Anuj Kumar. It has created a mobile-audience-as-a-service platform, and offers various other services to commerce and marketing firms to promote their mobile programmes. The company announced the launch of its fraud-analytics-as-a-service platform in Japan in October last year to detect and prevent mobile advertising fraud.
Affle operates through seven offices worldwide having over 236 employees as on May 2019. Besides Singapore, the company has offices in Gurugram, Mumbai, Jakarta and Kuala Lumpur.