Route Mobile IPO: Key things you must know before subscribing!

Have you ever heard that luck either showers you entirely or leaves you out to starve? And sometimes you get the taste of both. The market and the world at large are currently witnessing something like that. The COVID-19 pandemic has jeopardized the Indian economy.

The economy contracted in a quarter by a record of 23.9%. However, going by Prime Minister Narendra Modi's statement of"Aapda ko Avasar banana", some players of the market are trying to turn the pandemic into an advantage.

One such scenario is the Initial Public Offer (IPO) of Route Mobile Limited, a cloud-based service provider which is opening up for a public subscription today. The company proposes to raise Rs 600 crore through the IPO which comprises both fresh issue and offer for sale. As expected, the market is already on its toes, all ready to grab it. 

But is that all? It is essential that you know the crucial factors that will help you to weigh your options. So what’s the wait for? Quickly jump in to find out all the details.  

A Brief Background of the Route Mobile Limited

Founded in 2004, Route mobile provides a cloud communication platform as a service to enterprises, streaming applications, and mobile network operators. Through enabling multiple channels of communication to deliver messages to customers, suppliers, and employees, Route mobile works towards helping its clients in their digital strategy. 

The three key verticals offered by Route Mobile include:

Mobile Operator: Route Mobile provides a cloud communication platform as a service, hubbing solutions, SMS analytics, firewall, filtering, and monetization, and it has a direct relationship with 240 mobile networks worldwide.

Enterprise:  It provides a cloud-based communication platform. The chief strategist officer of Route Mobile, Guatam Badalia, has said that the company enjoys around 10% of the world's market share in the cloud communication platform segment.

Business Process Outsourcing: It provides client support, technical support, collection services, and booking. The company has serviced over 30,000 clients cumulatively since it started its operations, covering arrays of sectors like social media, banking, and financial services, aviation, internet/e-commerce, logistics, media and entertainment, telecom, and pharmaceuticals.

Route Mobile Financials

Let's have a look at the current financial position of Route Mobile Limited:

Summary of financial Information (Restated Consolidated)

Strength and Risk of Route Mobile limited

In order to make the right choice it is essential you get to know both the pros and cons. The CPaaS platform providers have witnessed traction over the recent years as mobile channels have become increasingly important for brands and enterprises to connect with customers. 

Analysts expect the trend to continue on the back of rising mobile subscribers globally, and the growing preference of digitalization of businesses as well as communication. They expect Route Mobile India to be a key beneficiary of this trend. 

Further, the probable gains which could be reaped at the time of listing, positive growth trends, demand for the business, and benefit of diversification has already placed the stock among the top picks of the investors.

On the other hand, adverse currency movements (80 percent of revenue from exports) can impact the company’s financial performance. Moreover, it's a highly evolving market and any inability to adapt to such changing conditions could adversely affect its business. And, since nearly 64 percent of the company's revenue comes from the top 10 clients, therefore any loss of a large client can impact the business significantly.

Details of the Route Mobile IPO

Even the greatest pandemic couldn’t deter the confidence of the market towards IPO. While a positive cloud prevails around the subscription numbers of Route Mobile IPO, it is essential that you get to know the key facts about Route Mobile IPO that will help you make up your mind and choose whether or not to get on board with the company.

Route Mobile Limited opened the IPO on 9th September. You can make subscriptions up to 11th of this month. Further, the minimum number of shares for which you can apply is fixed at 40 and in multiples of 40. 

The company has claimed that it will issue shares worth 600 crores of which 240 crore worth of shares are in the form of fresh issue. And, the remaining 360 crores will come in the form of OFS (Offer for Sale). This will be pitched by its promoters Sandip Kumar Gupta and Rajdipkumar Gupta. 

As the market seems to brace itself to welcome the stocks, you could clearly expect an oversubscription of the same in no time. Also, if everything goes as per plan, you will be seeing the stocks getting listed on the markets on 21st of September.

The company has assigned Kfintech Pvt ltd, ICICI securities Axis bank, IDBI capital, and Edelweiss Financial to take care of the IPO listing process. Being the forerunner of a new trend, Route Mobile India is the first among its peers to reach the floors of the stock exchange.

To top that, the management has claimed that the amount raised via Route Mobile IPO will be put to work under various heads. While a part might be used in fulfilling the working capital requirements, the rest might be used in repayment of debt & other borrowings, for the purchase of assets and other miscellaneous activities.

To Sum Up

As we know, the COVID-19 pandemic has really hurt the economy. But a lot of companies in the industry are trying to get back up or establish themselves and thus, are attempting to get the economy back on track. Many companies tried to ensure that they took the pandemic as an advantage. Route Mobile Limited is one such firm. It used this time to reconstruct itself and emerge stronger out of the pandemic. 

Route Mobile Limited announced to open its initial public offering on September 9 and close it on September 11, 2020. It’s high time you start thinking whether or not to get on board.