Affle India IPO: Here’s All You Need To Know
Affle India IPO will see shares offered in a price band of Rs 740-745, valuing the firm at Rs 1,900 crore at the upper end.
Affle (India) Ltd. will launch its initial public offering on Monday as its promoters look to enhance brand visibility and raise working capital.
The marketing and advertising technology solutions provider plans to raise nearly Rs 460 crore from its IPO—Rs 90 crore through an issue of fresh equity and nearly Rs 369 crores in an offer-for-sale through the IPO route.
Affle Holdings Pvt. Ltd., which currently holds 75 percent stake in the company, will offer 49.53 lakh shares in the sale. Axis Capital estimates Affle Holdings’ stake in the company to fall to nearly 53 percent after the offer.
- IPO Size: Rs 459 crore
- Fresh Issue: Rs 90 crore
- Offer for Sale: Rs 369 crore
The company said it has raised more than Rs 224 crore from anchor investors. Some of the largest institutional investors include Aberdeen, Franklin Templeton, Malabar India, Goldman Sachs, Reliance Capital, L&T Mutual Fund and Aditya Birla Sunlife.
The Affle India IPO will see shares offered in a price band of Rs 740-745 apiece, valuing the company at close to Rs 1,900 crore at the upper end, Bloomberg Quint’s calculations showed. After listing, the promoter group’s shareholding will fall to 68 percent from 92 percent of the total outstanding shares before the offer.
Affle India operates in two segments—consumer platform and enterprise platform. Currently, it makes over 97 percent its revenue from the consumer platform, which focuses on acquiring consumers, availing engagement and transactions through relevant mobile advertising, retargeting existing customers to complete transactions for e-commerce companies, converting online consumers into in-store walk-ins.
Through this platform, company earns on a cost-per-converted-user basis. The company’s enterprise platform provides end-to-end solutions for enterprises to enhance their engagement with mobile users.
Affle India reported net worth of Rs 72.4 crore with gross debt standing at Rs 9 crore at the end March 2019. Its cash, cash equivalents and other bank balances stood at Rs 30.4 crore in the same period.
The company’s pre-listing earnings per share as on March 31, 2019, stood at Rs 20 per share. At Rs 745 per share, the upper end of the Affle India IPO price band, the firm is valued at trailing price to earnings ratio of 37 times. ICICI Direct projects Affle India’s post-issue price at Rs 19 per share, assigning it a 39 times PE ratio for the same period.
- The company gets 65 percent of its revenue from its 10 clients, its top client alone contributing 22 percent. Inability to keep these clients or failure to attract broader range of customers could have a material adverse impact on its business, according to Ambit Capital.
- The legal, regulatory and judicial environment around data protection and other matters is constantly evolving and can be subject to a significant change.
- ICICI Direct said that trade associations and self-regulatory groups have also promulgated best practices and other industry standards relating to targeted advertising. Such losses could adversely impact the company’s financial performance in the future.
- Inability to compete in a highly competitive and crowded industry.
- Adverse ruling on outstanding litigations.