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BharatMatrimony’s IPO subscribed 4.4 times on final day

13 September, 2017

Online marriage services provider Matrimony.com Pvt. Ltd saw its initial public offering subscribed 4.4 times on the final day on Wednesday with strong demand from institutional and retail investors.

The public offering of 2.81 million shares, excluding the anchor allotment, saw bids for nearly 12.4 million shares, stock exchange data showed.

The qualified institutional buyers’ category was covered 1.88 times of the 1.5 million shares on offer. The retail portion, in which bids cannot exceed Rs 2 lakh per application, was covered nearly 18 times the shares reserved for the segment. The company was offering 10% discount to retail investors.

The portion set aside for non-institutional investors, comprising corporate bodies and wealthy individuals, saw bids for 41% of the shares reserved for them, data showed.

Eligible employees’ quota was covered 3.21 times, data showed.

The IPO was covered 1.36 times on day two on Tuesday. It had crossed two-third distance on the opening day on Monday.

Several domestic brokerage firms had recommended clients to subscribe to the issue for listing gains, even as the stock was available at a lofty valuation of 51 times its fiscal 2017 price-to-earnings (P/E) ratio.

IIFL Wealth Management has a positive outlook on Matrimony.com. It expects the company to dominate the largely unorganised and fragmented match-making market as a result of its brand recall and network of 140 retail centres.

“Matrimony.com incurred losses during FY14‐16 from a litigation that cost it around Rs 100 crore. Now that the litigation is settled, the company’s profitability has gradually looked up with a PAT of Rs 43.8 crore and Rs 14.6 crore in FY17 and Q1 FY18, respectively. Matrimony.com’s negative net worth of Rs 16.2 crore as of 30 June 2017 is a vast improvement from the March figure of negative Rs 7.61 crore – largely the outcome of its post FY17 profitability,” said IIFL analysts Rahul Jain and Ankit Tikmany in a note to investors on 8 September.

The Chennai-based company has set a price band of Rs 983-985 per share for a total IPO size of Rs 501.07 crore ($78.41 million).

Of which, the firm will issue fresh shares worth Rs 130 crore and the rest of the proceeds will go to selling shareholders, including the promoters.

At the upper end of the announced price band, Matrimony.com is seeking a valuation of close to 2,600 crore.

The company, which owns BharatMatrimony and a clutch of affiliated portals, raised about Rs 226 crore ($35 million) last Friday by allotting shares to anchor investors that included Baring Private Equity India and Goldman Sachs among 15 investors.

The company had refiled its draft proposal with the Securities and Exchange Board of India in May this year, five months after scrapping an earlier proposal due to weak market conditions in the aftermath of government’s demonetisation drive.

It received regulatory nod on 13 July.

There are no directly comparable listed peers for BharatMatrimony. Although Info Edge (India) Ltd—which runs BharatMatrimony’s competitor Jeevansathi.com—is listed, its valuation is dictated more by its job portal Naukri.com and its stake in Zomato.

ICICI Securities and Axis Capital acted as book running lead managers for the IPO.

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BharatMatrimony’s IPO subscribed 4.4 times on final day

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