At the issue price, the stock was quoting at 29 times FY20 earnings per share, on a fully diluted basis.
The issue was sold in the price band of Rs 345-350 from September 9 to September 11. The IPO had attracted 73.29 times subscription, with NII bids attracting 101 times bids, QIB 53 times and retail 12 times.
The unlisted shares of the company were commanding a premium of Rs 310-312 in the grey market.
Analysts said the company has a strong presence in the niche CPaaS market with high entry barriers and healthy financials. In its IPO report, Motilal Oswal Securities said that the company has a lean balance sheet with negligible debt and healthy return ratios. “Its working capital is also negligible as it has a large pre-paid client base that pays upfront,” Motilal noted.
Incorporated in 2004, the Mumbai-headquartered company carries on mainly three operations: Enterprise, mobile operator and business process outsourcing. The enterprise vertical primarily provides cloud-based communication platforms to enterprises.
The mobile operations include services such as SMS analytics, firewall, filtering, monetisation and CPaaS (cloud-communication platform as a service) and hubbing solutions. In April 2017, the company acquired a BPO Call2Connect, through which the company integrates the BPO capabilities with its enterprise voice platform.
Over 80 per cent of the revenues that the company generates is in foreign currency. According to the ROCCO Report 2020, the company was ranked as a tier I application-to-peer service provider internationally.
As of June 30, the company had served more than 30,150 clients since its inception. The company has direct relationships with over 240 mobile network operators (MNOs). It provides its enterprise clients from Africa, Asia Pacific, Europe, Middle East and North America access to over 800 mobile networks. Top 10 clients account for about 64 per cent of the company’s revenues, with the top client contributing 15.45 per cent to FY20 revenues.
Route Mobile, which has six strategically-located data centres, said its profit stood at Rs 79.60 crore in FY20 against Rs 74.8 crore in FY19 and Rs 58.10 crore in FY18. Return on equity (RoE) stood at 30 per cent for FY20 against 36 per cent each in FY19 and FY18. In terms of PAT margins, the company reported a margin of 8 per cent in FY20, down from 9 per cent in FY19 and 11 per cent in FY18.
In FY20, the company’s platform managed more than 30.31 billion billable transactions from its clients and was used by more than 2,700 clients. It managed 24.74 billion billable transactions in FY19. Total billable transactions for the company rose 38 per cent compounded annually, the company said in a presentation. The company has a total of 291 employees (including the ones in subsidiaries). Besides, it has 27 employees working outside India.