The initial public offering of CE Info Systems, which runs the brand MapmyIndia, was subscribed 154.71 times on the third day of subscription on December 13, and trades at a premium of Rs 1,050 in the grey market, as per data from IPO Watch.
This indicates a premium of more than 100 percent on the upper price band of the issue price at Rs 1,000-1,033 per equity share.
The issue received bids for 108.98 crore equity shares against an offer size of 70.44 lakh shares, with retail investors bidding for 15.20 times the allotted quota. While non-institutional investors subscribed 424.69 times the reserved portion, qualified institutional buyers bid for 196.36 times.
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MapmyIndia, a data and technology products and platforms company, is India’s leading provider of advanced digital maps, geospatial software and location-based IoT technologies.
While Axis Bank and JM Financial had a ‘neutral’ rating on the issue, Angel One, BP Wealth, ShareIndia and Ventura Securities recommended ‘subscribe’. Motilal Oswal, GCL Securities recommended ‘subscribe for listing gains’, whereas Anand Rathi and Proficient Equities advised to ‘subscribe for long term gains’.
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“MapmyIndia’s Revenue/EBITDA/PAT has grown at a 6 percent/42 percent/33 percent CAGR over FY19-21, while in the first half of FY22, it grew 81 percent/308 percent/163 percent, respectively. EBITDA margins expanded from 18.9 percent in FY19 to 45.2 percent in the first half of FY22. It enjoys a capital-efficient business model with zero debt, strong FCF and healthy return ratios of 23 percent,” noted Motilal Oswal in a report.
The brokerage is batting for MapmyIndia, given its leadership in digital mapping, strong entry barriers, robust profitable data and tech platform, along with consistent financials.
“The company is available at the upper end of the IPO price band at 58.8x its annualised FY22 earnings attributable to post-issue equity, demanding a market cap of Rs 5,500 crore. At the upper end of the IPO price band, the issue is priced at a P/BV (price-to-book value) of 13.54x based on its NAV of Rs 76.28 as of September 30. The company has an average return on net worth at 12.86 percent for the last three years,” said Anand Rathi.
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The Indian addressable market of digital maps and location-based intelligence services is expected to reach $7.74 billion by 2025 at a six-year average growth rate of 15.5 percent a year.
“MapmyIndia is all set to capitalise the exponential growth opportunity being the market leader. It also has an early mover advantage and a profitable business model with consistent financial track record and strong cash flows. However, valuation seems to be marginally rich, hence, we recommend a ‘subscribe-long term’ rating to this IPO,” said Anand Rathi.
The company is expected to finalise the basis of allotment on December 16. Unsuccessful bidders will get refunds in their accounts by December 17, while successful ones will get shares in their demat accounts on December 20.
The company is expected to debut on the National Stock Exchange and the BSE on December 22.
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