Route Mobile, the cloud communication services provider, listed with a massive 102.3 percent premium on September 21 after having strong response to the public issue.
The stock started off the first session at Rs 708 , against issue price of Rs 350 per share, which was ahead of street expectations. On the National Stock Exchange, it opened at Rs 717, a massive 104.9 percent premium over IPO price.
On the BSE, at 10:01 hours IST, it was trading at Rs 716.85, up 104.81 percent with 8.03 lakh volumes, while on the NSE, it traded with 108 percent gains at Rs 728.15 and the volume was 61.06 lakh shares.
Analysts had expected Route Mobile to list with a premium of around 60 percent over IPO price given the experienced management, strong financials, deepened relations with mobile network operators (MNOs) and increased digitalisation.
Route Mobile raised Rs 600 crore via public issue during September 9-11, which had comprised a fresh issue of Rs 240 crore and an offer for sale of Rs 360 crore by promoters.
Company is going to utilise net 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.
Route Mobile enjoys leadership position in the Cloud communication service. It provides services to enterprises, over-the-top (OTT) players and mobile network operators (MNOs). Its enterprise segment provides a cloud-based communication platform to enterprises, while mobile operations segment include services such as SMS analytics, firewall, filtering, monetisation and CPaaS (cloud-communication platform as a service) and hubbing solutions.
It has deepened relations with MNOs and has broadened product and service portfolio over the years through strategic acquisitions.
"Considering the growth prospects of the company (revenue growth CAGR at 37.61 percent), strong access to more than 800 networks across the world and rising work from home culture makes stock well positioned for future growth," Manali Bhatia, Head-Research at Rudra Shares & Stock Brokers told Moneycontrol.
Globally Route Mobile has 9 direct and 12 step-down subsidiaries serving its clients through 18 locations across Africa, Asia Pacific, Europe, Middle East and North America. Company generates over 80 percent of its revenue in foreign currency.
As of June 2020, Route Mobile had served more than 30,150 clients since its inception. The company has direct relationships with over 240 mobile network operators (MNOs).
With growing internet penetration, business models are evolving and cloud communication services are being used by enterprises for streamlining back-end operations as well as for engaging with customers and employees. Company has already evolved itself with number of acquisitions; management believes it would further continue to evaluate inorganic growth opportunities to diversify service offerings and geographic presence. Company also says it does not have any listed peers.
Company commands impressive return on net worth (RoNW) at 25.58 percent and has a positive operating cash flow over FY18-20.