Analysts expect Route Mobile to debut with a hefty premium when it is listed on bourses on September 21.
Route Mobile, which provides cloud-communication platform as a service to enterprises, was trading at more than 60 percent premium in the grey market over the issue price ahead of its listing on the bourses in the coming week.
The stock is available at a premium of Rs 200-240 per share in the grey market, Rudra Shares and CapitalVia Global Research told Moneycontrol. In percentage terms, it is 57-69 percent over the final issue price of Rs 350 per share, which is a significant jump from 45 percent early this week .
Route Mobile is set to debut with a hefty premium on bourses on September 21. It is expected to be the second bumper listing this month after Happiest Minds Technologies opened 111 percent higher on September 17, analysts said.
"At the upper end of the price band on FY20 basis it is demanding a PE of 25.3x, which we believe is quite reasonable and it will also gain higher traction as there are no listed peers for the company. Considering this, we believe the IPO will list at a significant premium over its issue price as a lot of value is left on the table," Keshav Lahoti - Associate Equity Analyst at Angel Broking told Moneycontrol.
The company provides cloud-communication platform as a service to enterprises, over-the-top (OTT) players and mobile network operators (MNOs). Its range of enterprise communication services includes application-to-peer (A2P)/peer-to-application (P2A)/2-Way Messaging, RCS, OTT business messaging, voice, email, and omni-channel communication.
"With company intending to capitalise on the growth opportunity in cloud-communications space and endeavouring to become a one-stop communications solution provider to enterprise clients and MNOs (mobile network operators), the prospects of the company look strong," Astha Jain, Senior Research Analyst at Hem Securities said.
The Rs 600-crore initial public offering witnessed a strong subscription of 73.3 times during September 9-11 as the portion set aside for qualified institutional buyers was subscribed 89.8 times, non-institutional investors 193 times and retail 12.6 times.
The public issue comprised a fresh issue of Rs 240 crore and offer for sale of Rs 360 crore by promoters Sandipkumar Gupta and Rajdipkumar Gupta.The proceeds will be used for paying loans, acquisitions and other strategic initiatives, purchase of office premises in the Mumbai region and general corporate purposes.