The initial public offering of IndiaMart InterMesh Ltd, which operates an online business-to-business (B2B) marketplace, was fully covered on the second day of the issue on Tuesday.
The offering of about 2.7 million shares, excluding the portion reserved for anchor investors, received bids for nearly 2.8 million shares at the end of the second day, stock-exchange data showed. The book was subscribed 1.04 times.
Subscription was led by qualified institutional buyers, which bid for 1.05 times the shares set aside for them. Retail investors bid for 2.47 times their quota while high-net-worth individuals bid for 3% of the shares reserved for them.
The IPO had crossed the halfway mark on its first day on Monday.
Ahead of the IPO, IndiaMart attracted a number of marquee institutional investors including venture capital funds, hedge funds and a sovereign wealth fund as anchor investors.
The Delhi-based firm, founded by Dinesh Chandra Agarwal, raised a total of Rs 213.57 crore (around $30.7 million) on Friday by allotting nearly 2.92 million shares to 15 anchor investors. Shares were allotted at the upper end of the Rs 970-973 price band set for the IPO, according to a stock-exchange filing.
IndiaMART is seeking a valuation of Rs 2,800 crore ($402 million at current exchange rates) from the IPO.
The offering, entirely a secondary market sale by promoters, venture capital investors and other selling shareholders, has been lowered in value terms.
Intel Corp.’s venture capital arm; Accion Frontier Inclusion Mauritius, a fund managed by venture capital firm Quona Capital; and another venture capital firm Amadeus are partially exiting their respective stakes.
The company was seeking an estimated valuation of Rs 4,000 crore at the time of filing its draft prospectus.
The markdown in estimated valuation reflects the market correction in the last one year resulting from a liquidity crunch in the shadow banking segment besides slowing economic growth.
The IPO size is now pegged at Rs 475 crore ($68 million) and will result in 17% stake dilution on a post-issue basis.
IndiaMart’s public issue size was estimated at Rs 550-600 crore ($88 million then) through a secondary market sale which would see a 15% stake dilution.
IndiaMart will not get any proceeds from the share sale. The net proceeds, after deducting the issue expenses, will go to the selling shareholders.
Promoters Dinesh Chandra Agarwal and Brijesh Agrawal will together sell 1.43 million shares, lower than the 1.57 million shares earlier planned.
ICICI Securities, Edelweiss Financial Services and Jefferies India are the merchant bankers arranging and managing the share sale.