One of the country’s largest online B2B marketplaces for small and medium enterprises, IndiaMART InterMESH, has launched a QIP (qualified institutional placement) to raise around Rs 1,100 crore, sources with knowledge of the matter told Moneycontrol on February 17.
“The indicative issue price for the QIP is Rs 8,615 per equity share which is at a 4.97 per cent discount to the SEBI floor price,” one of the sources mentioned above said.
Moneycontrol was the first to report the firm’s QIP plans on January 12, 2021.
“The promoters may sell an additional 2 percent post the QIP to mop up liquidity which has been disclosed in the offer document," a second individual told Moneycontrol.
“ICICI Securities, Edelweiss and Jefferies are the investment banks working with the company on the proposed fund raise,” he added.
“Law firms Shardul Amarchand Mangaldas and AZB & Partners are the legal advisors to the QIP, a third source added.
“The plan is for the firm to raise funds for potential acquisitions or inorganic growth opportunities going ahead in the post Covid-19 era," he elaborated.
Earlier in August 2020, consumer internet company Info Edge had launched a QIP to raise Rs 1,875 crore in a bid to scout for opportunistic acquisitions.
All the four individuals spoke to Moneycontrol on the condition of anonymity. Moneycontrol could not immediately contact IndiaMART InterMESH, the investment bankers and law firms for an immediate comment.
On November 24, 2020, in an interview with CNBC TV-18, Dinesh Agarwal, Founder and CEO, IndiaMART Intermesh, 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 that 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 had revenues of Rs 623 crore in FY20 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.