Subscribe to IndiaMART InterMESH: Nirmal Bang

The public issue of Indiamart consists of offer for sale of equity shares of Rs 475 cr by the promoter group, Intel capital, Accion Frontier Inclusion and Other selling shareholders
Investment Rationale:
-Dominant Player in its category
-Grow the business by attracting new clients and up scaling the current     clients
-Diversification in different geographies and industry leads to lower risk
-Internet penetration will help in attracting new customers
-Improving financials

Valuation and Outlook

With high internet penetration, IndiaMart presence in different verticals and geography we believe Indiamart, will be able to capture the rising opportunity in the industry. Being an ecommerce company, investment is majorly into platform which is already build, so going ahead, the company cost would not grow in comparison to sales leading to improvement in the profitability. The company has one time expense of Rs 65 r in FY19 due to share buyback obligation which is over. Adjusting to that PAT for FY19 stands at Rs 85.3 cr. FCFF & Adj ROE for FY 19 stands at Rs 250.0 cr & 53.4% respectively. As per our rough estimates at the given upper price band of issue of Rs 973, Indiamart is offered at EV /Ebitda of 16.3x FY20E which is attractive. We recommend subscribing to the issue.

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