Route Mobile's Rs 600-cr IPO to open on Sep 9; sets price band at Rs 345-350 per share

Route Mobile, cloud communications service firm, on Friday fixed price band of Rs 345-350 a share for its Rs 600 crore-initial share-sale offer that will open for public subscription on September 9.

Route Mobile, cloud communications service firm, on Friday fixed price band of Rs 345-350 a share for its Rs 600 crore-initial share-sale offer that will open for public subscription on September 9. The public offer comprises a fresh issue worth Rs 240 crore and an offer for sale (OFS) of Rs 360 crore by promoters -- Sandipkumar Gupta and Rajdipkumar Gupta, Route Mobile said in a statement.

The initial public offer (IPO) will conclude on  September 11 and the offer for anchor investors will be finalised by September 8. Up to 50 per cent of the issue can be reserved for qualified institutional buyers, and 60 per cent of this portion can be kept aside for anchor investors, while 35 per cent will be for retail investors and 15 per cent for non-institutional bidders, the statement said.

Its promoter and managing director Rajdipkumar Gupta said it is targeting acquisitions, retiring part of the financial liabilities (at Rs 54.9 crore) and having one more office in Mumbai through the proceeds of the issue. The company proposes to utilise the net proceeds towards funding for repayment or pre-payment, in full or part, of certain borrowings of the company; acquisitions and other strategic initiatives; purchase of office premises in Mumbai; and general corporate purposes. It had received approval from markets regulator Sebi in December 2019 to float the IPO.

The cloud communications service provider had initially filed for it's IPO in January 2018, later it refiled the document in October 2019. Due to unfavourable market condition, the company failed to bring its IPO even after receiving approval in 2018, market sources said.

ICICI Securities, Axis Capital, Edelweiss Financial Services and IDBI Capital Markets & Securities are the managers to the issue. The company said it has served over 30,000 clients and has a little less than 300 employees excluding its business process outsourcing unit. Its revenues have grown at a compounded annual growth rate of 38 per cent in the last three fiscal years and stood at Rs 968 crore in FY20, while the operating profit margins have been a mixed picture that consists of a sharp decline in FY19 to 11.5 per cent, which was maintained in FY20.

Cash on book stood at Rs 158 crore as of June 30 this year. Apart from Route Mobile, the initial share-sale of IT services firm Happiest Minds Technologies will be open for public subscription during September 7-9. The IPO is expected to garner Rs 702 crore.

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