The initial public offering (IPO) of Route Mobile Ltd was subscribed a little over four times on the second day on Thursday with investor interest coming up across all categories.
The offering of about 12.173 million shares—excluding the anchor investors’ portion—received bids for nearly 50.51 million shares. The book was subscribed 4.15 times at the end of day two, stock-exchange data showed.
Retail investors bid for 6.71 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 2.03 times.
Institutional investors bid for about 1.25 times their quota, stock-exchange data showed.
On the grey market, shares of Route Mobile were quoting at a premium of Rs 140-150 apiece over its price band, a grey market dealer 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) by allotting 5.14 million shares at the upper end of the Rs 345-350 per share price band to 23 institutional investors including Kuwait Investment Authority and Vantage Equity Fund, a Category-III alternative investment fund (AIF) floated by Kenneth Andrade-led Old Bridge Capital.
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 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.
Singapore-based Affle Holdings Pte. Ltd, which provides mobile commerce and marketing solutions for consumers and businesses, went public in July 2019. Its shares made a positive debut on the stock exchanges.
In December 2010, One97 Communications Ltd, the parent of e-payments and e-commerce firm Paytm, had filed a draft prospectus for an IPO but shelved its plans citing volatile market conditions.
Route Mobile, formerly RouteSms Solutions Ltd, was founded in 2004. It employs close to 300 people. The company caters to the requirements of the mobile communications industry, offering solutions and services to mobile network operators, enterprises, over-the-top content firms, SMS aggregators and resellers.
Its solutions include an SMS firewall, which monitors and controls large quantities of text messages sent to one or multiple destinations. The company also monitors the content of text messages and filters the messages based on defined keywords, rules, subscriber identity and locations to prevent spoofing.