After a strong debut of Happiest Minds Technologies, Route Mobile is also expected to witness stellar listing in the coming week given the strong financials and management, market leadership in cloud-communication, expected solid growth in digitalisation and hefty subscription.
The cloud communication services provider will list on bourses on September 21 and the final issue price has been fixed at Rs 350 per share.
Experts feel the listing premium could be in the range of 55-70 percent, i.e. Rs 550-600 per share against issue price and are bullish on prospects of the company citing rapid increase in digitalisation post COVID-19.
Route Mobile was trading with a premium of more than Rs 200 per share in the grey market against final IPO price.
"We believe there is a high probability of yet another bumper listing in the range of Rs 550-600 levels which translates 57-71 percent gain on allotment price (Rs 350)," Prashanth Tapse, AVP Research at Mehta Equities told Moneycontrol.
He is optimistic on Route Mobile's growth story considering its leading position in cloud-communication, OTT segment and MNOs space.
Route Mobile does not have a directly comparable listed peer in India. The company will become the second only firm in the larger mobile communication services after Affle India which trades at PE 100x.
"Company has deepened relations with MNOs and has broadened product and service portfolio over the years through strategic acquisitions. Being the only listed peer in this space, stock would gain prominence. Thus, we expect the listing to pop up in the range of Rs 550-580 which is at a premium of around 57-65 percent to the issue price," Manali Bhatia, Head-Research at Rudra Shares & Stock Brokers said.
Astha Jain, Senior Research analyst at Hem Securities expects the listing price at around Rs 560, i.e. 60 percent premium over IPO price, while Gaurav Garg, Head of Research at CapitalVia Global Research feels Route Mobile may open at Rs 600 on the listing day.
Garg believes the sector is very promising, as with growing technology and almost every industry becoming an IT enabled enterprise, there is a good potential for this stock as the sector has not yet saturated and is still in a growing stage. Thus a great potential for growth can be harnessed, he said.
Route Mobile, which provides cloud communication platform as a service (CPaaS) to enterprises, over-the-top (OTT) players and mobile network operators (MNOs), raised Rs 600 crore via public issue during September 9-11.The IPO, which was subscribed 73.3 times, comprised a fresh issue of Rs 240 crore and offer for sale of Rs 360 crore by promoters Sandipkumar Gupta and Rajdipkumar Gupta. The company will utilise fresh issue proceeds for repayment of certain loans, acquisitions and other strategic initiatives, purchase of office premises in the Mumbai region and general corporate purposes.