Matrimony.com IPO sails through, subscribed 1.08 times on Day 2




IFL Wealth expects the IPO proceeds to be gainfully utilised, leading to higher revenues from increased brand awareness and lower rentals and interest expenses. NSEBSECentrumLoading data…

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      ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIES NEW DELHI: The initial public offering (IPO) of Matrimony.com got fully subscribed on the second day of the bidding process on Tuesday.

      The IPO of the owner of online match making portal BharatMatrimony.com received bids for 30,35,265 shares against the total issue size of 28,11,280 shares, data available with the NSE and BSE showed.

      As of June 30, 2017, the company had 140 retail centres distributed across India where customers can walk in and register on their websites. Its flagship brand, BharatMatrimony, has 15 language based domains under its umbrella. They also have other portals like Elite Matrimony, Community Matrimony, Matrimony Directory, Matrimony Photography, Matrimony Bazaar, Matrimony Directory and Matrimony Mandaps.

      Brokerage Arihant Capital said that the technology is evolving at much faster pace than anticipated and hence if company fails to keep pace with changing technology it could adversely impact its growth.

      The issue has been offered in a price band of Rs 983-985 per equity share. At the upper price band of Rs 985 the stock is available at P/E of 48 (x) based on FY17 annualised EPS. We have “3 star” rating for the issue, it said.

      The issue comprises fresh issue of up to Rs 130 crore and an offer for sale (OFS) of up to 37,67,254 shares. The company this weekend said it has allotted 22,93,277 equity shares at Rs 985 per share (including share premium of Rs 980 per share) aggregating to Rs 225. 88 crore to 10 anchor investors including Goldman Sachs, HDFC Trustee company and Baring Private Equity India AIF. Experts are mixed on the IPO with some brokerages recommending subscribe on the issue, as they see healthy listing gains, others are not that sanguine. For them, it is a clear ‘avoid’.

      IIFL Wealth expects the IPO proceeds to be gainfully utilised, leading to higher revenues from increased brand awareness and lower rentals and interest expenses.

      Focused expansion of its marriage services business through cross selling and assisted services could also help the company move up the value chain, it said.

      “The stock is available at 51 times FY17 P/E with a 10 per cent discount to retail investors. It may be noted that the nature of the Matrimony.com business is not comparable to that of Just Dial and Info Edge,” the brokerage said, while subscribing to the issue for listing gains.

      Meanwhile, Centrum Broking remained cautious on the issue and recommended avoid on it. It cited three reasons to avoid the IPO.

      “Although there could be fancy on the street for such a kind of consumer focused internet services company, but owing to weak financials (net losses in the past and erosion of net worth) we are not comfortable recommending the IPO,” it said.

      The brokerage said that at the upper price band of Rs 985, the offer is valued at 46.2 times P/E on FY17 basis (post dilution). Although consumer internet services companies trade at premium valuation on account of their fancy on the street but in comparison to peers matrimony valuation looks stretched on account of weaker financials, it said. Besides, it noted that 74 per cent of the issue is Offer for Sale. Even if money raised at such valuations was flowing into the company, it would have ultimately belonged to shareholders, it said.




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