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B2B internet leader IndiaMART InterMESH looks to raise around Rs 1,000 crore via QIP for M&A war chest

This would mark the debut fundraising exercise for IndiaMART InterMESH that has seen its share price skyrocket over 800 percent since its IPO in June 2019

January 12, 2021 / 12:49 PM IST
 
 
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IndiaMART InterMESH, the country’s largest online B2B marketplace for small and medium enterprises whose stock has skyrocketed in recent months, is preparing its first fundraising exercise, people with knowledge of the matter told Moneycontrol.

“The company is exploring options to raise around Rs 1,000 crore via the qualified institutional placement (QIP) route but is yet to take a final call on the quantum or the instrument to be used. These are early days and a decision is expected after the board meeting next week,” said one of the persons cited above.

The Noida-based company, whose stock price has risen nearly four-fold in the last six months, is scheduled to meet on  January 18 to consider its quarterly results and fundraising options. From levels of Rs 2,199 on July 13, 2020, the scrip surged to as high as Rs 7,991 at the end of day’s trade on January 11, 2021.  The company made its market debut in June 2019 with an issue price of Rs 973 a share.

“ICICI Securities, Edelweiss and Jefferies are the investment banks working with the company on the proposed fundraise. They were involved in the IPO as well,” a second person added.

“The plan as of now is for IndiaMART InterMESH to raise funds for potential acquisitions or inorganic growth opportunities going ahead in the post-Covid-19 era,” said a third individual. Earlier in August 2020, consumer internet company Info Edge launched a QIP to raise Rs 1,875 crore in a bid to scout for opportunistic acquisitions.

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All three persons spoke to Moneycontrol on the condition of anonymity. Moneycontrol is awaiting an email response from IndiaMART InterMESH and has sent reminders. This article will be updated as soon as we hear from the firm. ICICI Securities, Edelweiss and Jefferies declined to comment.

In an interview with CNBC-TV18 on November 24, Dinesh Agarwal, Founder and CEO, IndiaMART InterMESH had said: “In June, July, August and September, a lot of economic revival took place, unlocking took place. There was pent-up demand  which resulted in a net addition of around 8,000 paying customers.”

The firm counts the likes of private equity fund Westbridge Capital, US hedge fund Steadview Capital and the Kuwait Investment Authority as its investors.

A brokerage report by Motilal Oswal in November 2020 said the company's traffic and business inquiries had risen by 38 percent and 56 percent, respectively, from the pre-COVID levels, which augured well for the firm. The brokerage had said it remains confident in the company's strong fundamental growth in operations driven by a) high growth in digitisation among the SMEs, b) the need for out-of-the-circle buyers, c) a strong network effect, d) >70 percent market share in the underlying industry, e) the ability to increase ARPU on account of low price sensitivity, and f) high operating leverage.

IndiaMART InterMESH posted revenues of Rs 623 crore in FY 19-20 with a profit of Rs 146 crore. According to its website, the firm, founded in 1999, provides a platform to SME’s, large enterprises as well as individuals and connects buyers with suppliers across product categories and geographies in the country.  It claims to have a 60 per cent market share of the online B2B classified space in India. It has more than 113 million buyers, 6.2 million-plus buyers and more than 69 million products and services, the site says. As of September 2020, it had 2,917 employees located across 41 offices in the country.
Ashwin Mohan
first published: Jan 12, 2021 12:27 pm

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