Infibeam’s IPO, the first ever by an Indian e-commerce company, has got off to a sedate start. Day 1 of the IPO, which will run from 21st to 23rd March, saw 21% of shares on offer being snapped up by investors. Infibeam is trying to raise Rs. 450 crore and dilute 20% of its equity through this stock sale.
The IPO run into problems prior to its opening when 2 of the 4 investment banks opted out over concerns over the pricing and the timing of the issue. The company has fixed a price band of Rs. 360-Rs. 432 per share, and that translates into an Enterprise Value/Sales multiple of 4.3x-5.2x, which is being seen as steep by investors.
Like other e-commerce companies, Infibeam had been running in losses, but the company had turned profitable in the first six months of 2015-2016. The company posted a revenue of Rs.171.3 crore and a net profit of Rs.6.6 crore for the six months ended September 2015. It reported a revenue of Rs.288.2 crore at a net loss ofRs.9.8 crore for the year ended 31 March 2015.
The firm will use the IPO proceeds to set up a cloud data centre and 75 logistics centres, and compete with bigger players like Flipkart and Snapdeal which are backed by VCs and private equity funds.