Route Mobile

IPO Size

`600 Cr

Price Band

`345-350 Per Share

Minimum Lot Size

40 Share

Face Value

`10 Per Share

Employee Discount

NA

Retail Allocation

35%

Issue Open Date

09 Sep 20

Issue Close Date

11 Sep 20

Listing Date

21 Sep 20

About the Company:

A leading Cloud Communication Platform provider that provides wide range of enterprise communication services includes smart solutions in Messaging, Voice, Email, and SMS Filtering, Analytics & Monetization. After its inception in 2004, Route Mobile has been enhancing mobile communications through technology upgrades and product innovations. The cloud service provider has not restricted its clientele basket in domestic areas but catering the needs in geographies too. The services of the company are highly customizable and user-friendly for their clients. Currently, the enterprise is serving more than 30,000 clients globally in 18 locations across Africa, Asia Pacific, Europe, the Middle East, and North America.

Outstanding Litigation:

S.No. 1 - Company 2 - Directors 3 - Promoters
Entity Name By the Company Against the Company By the Director Against the Director By the Promoter Against the Promoter
Criminal cases - - - - - -
Material civil cases - - - - - -
Taxation matters - 523.29 - - - -
Regulatory Procedings - - - - - -
Amt. (In Million Rs.) - 523.29 - - - -

Financial Statements:

Income Statement FY18 FY19 FY20 Q1FY21
Gross Operating Income 5094.85 8523.77 9681.02 3122.95
Cost of Employee & Inventory 3912.04 7224.62 8223.55 2624.52
Other Expenses 381.46 299.52 340.8 95.44
EBITDA 801.35 999.63 1116.67 402.99
Depreciation 158.38 218.71 226.78 60.24
Interest 78.03 130.89 48.69 9.89
Profit Before Tax 564.94 650.03 841.2 332.86
Tax 98.17 104.71 150.18 63.52
Profit After Tax 466.77 545.32 691.02 269.34

Recommendation

As per CA Ajay Chouhan, SEBI Registered Research Analyst, recommendation is to Subscribe. The company is evolving itself in a less penetrated market so the real potential of its offerings has not unlocked yet. The enterprise is serving world's largest organizations, including several Fortune Global 500 companies. The infrastructure of the company does not demand heavy capital infusion, which makes it a potential player for a portfolio. Moreover, the large clientele base avoids dependency upon single firm. The IPO is available at a P/E multiple of 25.63x considering the upper price of the band. Investors should consider this it for listing gains and for long term purpose too.

Promoter of the Company

The promoters of the company are Sandipkumar Gupta and Rajdipkumar Gupta.

Peer Comparison

The company doesn’t have any serious competitor while there is a small presence of proxy services offered by Tanla Solutions and Tata Communications.

Objectives of the Issue

Offer for Sale

The object of the Offer for Sale is to allow the shareholders to sell an aggregate of up to [●] Equity Shares held by them. The company will not receive any proceeds from the Offer for Sale. Offer for Sale Size is of 10,140,845 Equity Shares making it an amount of Rs. 360 crores at the upper price band.

Fresh Issue

The net proceeds from the fresh issue will be utilized for repayment of certain borrowings of the company amounting at 36.9 crores, acquisitions and strategic initiatives amounting at 83 crores and 65 crores will be utilized for purchase of office premises in Mumabi. The company will also utilize the proceeds for General Corporate Purpose which shall not exceed 25% of the Gross Proceeds.