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Subscribe to Route Mobile: Motilal Oswal

Motilal Oswal has come out with its report on Route Mobile. The research firm has recommended to ''Subscribe'' the ipo in its research report as on September 08, 2020

September 14, 2020 / 11:51 AM IST

Motilal Oswal's IPO report on Route Mobile

Route Mobile Ltd (RML) is among the leading CPaaS (Communications Platform as a Service) provider. Its services include Message, Voice, Email, SMS Filtering, Analytics & Monetization. Omni-channel cloud communication platform service provider: RML is a leading omni-channel CPaaS provider with its A2P (Application-to-peer) service being ranked 2nd globally among tier-1. A2P SMS market is currently the largest segment; expected to grow at 4.4% CAGR over FY18-FY23. With growing internet penetration, demand for CPaaS is increasing to streamline back-end operations as well as to engage with various stakeholders. RML processed >3,031cr billable transactions in FY20 (20% CAGR over FY18-20), while in Q1FY21, it processed >695cr transactions.

Valuation and Outlook

At the higher end of the price band, the issue is valued at 29x FY20 P/E (fully diluted), which is comparable to mid-sized IT firms (no listed peers available). We recommend Subscribe to the IPO given RML’s strong presence in niche CPaaS market with high entry barrier and healthy financials. Further given the small offer size and presence in niche IT space, one may get listing gains too.

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