The initial public offering (IPO) of Route Mobile Ltd successfully sailed through on the first day of the issue on Wednesday thanks mainly to high demand from retail investors.
The offering of about 12.173 million shares—excluding the anchor investors’ portion—received bids for nearly 12.231 million shares. The book was subscribed one time at the end of day one, stock exchange data showed.
Retail investors bid for 1.8 times their quota while the portion set aside for non-institutional investors such as corporate houses and high net-worth individuals (HNIs) was covered nearly 47%.
Institutional investors bid for about 1.2% of their quota, stock-exchange data showed.
On the grey market, shares of Route Mobile were quoting at a premium of Rs 180-190 apiece over its price band, two grey market dealers told VCCircle.
The grey market is an over-the-counter market where IPO shares are traded before the official listing on a stock exchange.
Ahead of the IPO, the company raised Rs 180 crore ($24.4 million) from a bunch of anchor investors, by allotting 5.14 million shares at the upper end of the Rs 345-350 per share price band to 23 institutional investors.
Kuwait Investment Authority, the West Asian nation’s sovereign wealth fund with nearly $600 billion in assets, subscribed to shares worth Rs 13.82 crore, stock-exchange data showed.
Vantage Equity Fund, a Category-III alternative investment fund (AIF) floated by Kenneth Andrade-led Old Bridge Capital, also bought shares worth Rs 13.82 crore.
UK-based hedge fund Theleme Partners subscribed to shares worth Rs 10.41 crore while IIFL’s Special Opportunities Fund (Series 7), which typically makes public market or pre-IPO bets, bought shares worth Rs 7 crore.
Anchor investors, also known as cornerstone investors, are institutions that accept a one-month lock-in for a sizeable allocation of shares. Their participation highlights investors’ confidence in an IPO and sets a benchmark for the investor community at large.
Some of the Indian asset managers that subscribed to Route Mobile’s shares were Axis Mutual Fund, ICICI Prudential, Aditya Birla Sun Life Mutual Fund, Franklin Templeton Mutual Fund, SBI Mutual Fund and Mirae Asset Management. SBI Life Insurance was the sole Indian life insurance firm that participated in the anchor allotment.
Route Mobile’s IPO will close on Friday. The company is seeking a valuation of Rs 1,990 crore through the IPO that comprises a fresh issue of shares worth Rs 240 crore and an offer for sale worth Rs 360 crore by promoters Sandipkumar Gupta and Rajdipkumar Gupta.
The IPO, which closes on Friday, will result in a stake dilution of 30.15% on a post-issue basis at the upper end of the price band.
ICICI Securities, Axis Capital, Edelweiss Financial Services and IDBI Capital Markets & Securities are merchant bankers managing Route Mobile’s IPO.
Route Mobile, a messaging and voice application programming interface company, does not have a directly comparable listed peer in India. The company will become the second firm in the larger mobile communication services segment to go public