Info Edge eyes up to $125M via QIP, may buy firms to boost property unit 99acres

Info Edge (India) Ltd, which runs a slew of internet properties, including Naukri99acresJeevansathi, and Shiksha, looking to raise fresh financial resources and may scoop up as much as Rs 750 crore ($125 million) in one or more tranches through qualified institutional placement (QIP), it said on Friday. According to the company’s management, the firm took up the QIP route as it does not believe in debt funding.

Focus on 99acres

The company said it is anticipating online real estate players to raise about $300 million in the next three years from VC/PE investors. Thus, Info Edge has decided to pump in $125 million over the next few years to invest in newer cities, develop the product, acquire companies, provide analytics to ensure smart buying through their portals, increase mobile traffic and build the brand.

The firm is looking to buy firms which may complement its property search site. Some of the potential acquisitions could happen in the area of ERP, analytical tools and automation for brokers.

The online classifieds segment in the real estate sector is worth Rs 300 crore and with the investment, the firm aims to have a dominant share in the market. After, the firm claims that 99 acres will be the second engine of growth.

While there are about six companies in its portfolio, Info Edge plans to add not more than two companies over the next few years.  

Other investments

The money could also be used to participate in further round of funding for its existing portfolio firms such as Zomato and Meritnation among others to maintain its holdings as those companies go on to raise more money. Info Edge has been putting additional cash over time in the string of digital properties it has backed at an early stage.

At the current market price it would need to dilute 9-10 per cent through the institutional placement.

Meanwhile, Info Edge (India) Ltd reported 20 per cent increase in its standalone revenues for the quarter ended June 30, 2014 to Rs 144.9 crore from Rs 120.76 crore in the same period last year.

Net profit in the same period rose to Rs 39.8 crore from Rs 29.4 crore in Q1 last year.

Sequentially, revenue rose around 5 per cent while net profit increased 18.5 per cent compared with the quarter ended March 31, 2014.

These are standalone numbers and do not include financials of sites such as Meritnation and Zomato run by its subsidiaries.

For the full year ended March 31, 2014, its net profit rose 25.66 per cent to Rs 128.49 crore, while revenues grew 16.15 per cent to Rs 505.14 crore, mainly on the back of a 47.2 per cent growth in the real estate business, while the recruitment solutions business grew 9.8 per cent. This explains why the firm is especially bullish on its realty search portal.

Noida-headquartered Info Edge employs around 3,000 people and operates through 48 offices in 31 cities in India and overseas.

Early this year, Info Edge co-founder and CFO Ambarish Raghuvanshi had quit the firm.

(Edited by Joby Puthuparampil Johnson)

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