The IPO, which is selling at Rs 345-350 per share, seeks a valuation of 29 times the real value of fiscal year 2020 (fully diluted). Analysts are positive on the subject and believe that the IPO can offer a trading pop as well as long-term gains.
The company has no listed pairs. The proxy peers, which have a small presence in the services offered by Route Mobile, are Tanla Solutions and Tata Communications.
Motilal Oswal Securities said the issuance is valued at 29 times the FY2020 P / E, which is comparable to mid-size IT firms. He has recommended ‘Subscribe’ to the IPO given the company’s strong presence in the CPaaS niche market with high barriers to entry and healthy finances. “Given the small size of the offering and presence in the niche IT space, trading gains can also be made,” the brokerage said.
Being in the category of services known as software as a service (SaaS) is a beneficial combination for both companies such as Route Mobile and their customers, since they do not have to invest in maintaining servers and connections in addition to uploading different types of content or perform all the administrative work necessary to keep a communications platform functional, Ashika Institutional Equities said.
“Overall, the company has a track record of stable finances, strong rates of return and positive operating cash flows. Also, being the only player listed in this space, it will generate interest,” the brokerage added.
“The problem appears to be reasonable given the healthy growth the firm is witnessing, its strong relationships with clients across the board, including with enterprises, mobile network operators and OTT operators, a diverse client base across industry verticals. industry, a good financial track record and a highly experienced promoter team, “said KR Choksey’s India Equity Institutional Research.
Angel Broking said that the company’s management has so far infused only Rs 6 lakh of capital into the company, and it will have a market capitalization of Rs 1,990 crore in the higher price band.
“This shows that it is a scalable business model, which can grow without an injection of capital. Unlike many other companies, Covid-19 has generated better growth prospects for the company given greater adoption of digital technologies,” said the brokerage.
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