Route Mobile IPO

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(i) Incorporated in 2004 and has headquartered in Mumbai, India, Route Mobile provides a cloud-communication platform as a service (“CPaaS”) to enterprises, over-the-top (“OTT”) players, and mobile network operators (“MNOs”).

(ii) They were ranked second globally as a tier 1 application-to-peer (“A2P”) service provider in 2017. They were also ranked first for ‘value-added services’ provided, the ‘implementation process’, and our ‘uptime performance’ among tier 1 vendors. (Source: ROCCO Report 2017).

(iii) Business Verticals:

a) Enterprise business– Route Mobile enterprise vertical primarily provides a cloud-based communication platform to enterprises to enable digital communication through multiple channels including RCS, A2P / P2A messaging, 2Way Messaging, OTT business messaging, enterprise email and URL shortening, and Mail2SMS.

b) Mobile Operators: Route Mobile main service offerings in this segment include SMS analytics, firewall, filtering, monetization, and CPaaS, and hubbing solutions. The analytics-based SMS firewall solution helps MNOs identify grey route traffic terminating on their networks, block grey route traffic, identify the source of such grey route traffic, and monetize such traffic.

c) BPO Services: They provide a range of BPO services including client support, technical support, booking, and collection services.

Amazing Stats:

a) In the three months ended June 30, 2020, the Route Mobile cloud communications platform has processed more than 6.95 billion billable transactions.

b) In Fiscal 2020, the platform managed more than 30.31 billion billable transactions from the clients and was used by more than 2,700 clients

c) In Fiscal 2019, it managed more than 24.74 billion billable transactions.

d) They have established direct relationships with MNOs that provide clients with global connectivity. As of June 30, 2020, they had direct relationships with over 240 MNOs and four short messaging service centers hosted in various geographies across the globe. They are able to access more than 800 networks across the world, as of June 30, 2020.

Clients

The clients include sectors including social media, banking, and financial services, aviation, retail, internet/e-commerce, logistics, healthcare, hospitality, media and entertainment, pharmaceuticals, and telecom.

Revenue

The revenue from operations was ₹ 504 Crores, ₹ 846 Crores, ₹ 956 Crores, and ₹ 309 Crores in Fiscal 2018, 2019 and 2020, and in the three months ended June 30, 2020, respectively.

80% of revenue comes from exports and 20% from domestic operations.

Objects of the Route Mobile IPO:

(i) Offer for Sale (360 Crores) Promoters namely Mr. Sandip Kumar Gupta and Rajdip Kumar Gupta are selling 180 Crores each. (ii) Fresh Issue (240 Crores) The funds received from the fresh issue will be utilized for; 1. Repayment or pre-payment, in full or part, of certain borrowings of our Company. 2. Acquisitions and other strategic initiatives. 3. Purchase of office premises in Mumbai. 4. General corporate purposes.
DRHP of Route Mobile IPO
RHP of Route Mobile IPO

Route Mobile IPO Details:

Open Date: Sep 09 2020
Close Date: Sep 11 2020
Total Shares: 17391304
Face Value: ₹ 10 Per Equity Share
Issue Size: 600 Cr.
Lot Size: 40 Shares
Issue Price: ₹ 345-350 Per Equity Share
Listing At: NSE,BSE
Listing Date: Sep 21 2020

Promoters And Management:

(i) Chandrakant Gupta, aged 67 years, is the Chairman and Non-executive Director of the Company. (ii) Rajdipkumar Gupta, aged 45 years, is the Managing Director and Group Chief Executive Officer of our Company. He holds a bachelor’s degree in science (physics) from the University of Mumbai and a master’s diploma in software engineering from Aptech Computer Education. He is also a certified HTML programmer Perl programmer and active server pages programmer from Brainbench. (iii) Sandipkumar Gupta, aged 46 years, is the Non-Executive Director of our Company. He holds a bachelor’s degree in commerce from University of Mumbai. He is also a qualified chartered accountant and a member of the Institute of Chartered Accountants of India. He is a SAP certified solution consultant – mySAP Financials – Managerial and Financial Accounting. He is also the Promoter of our Company and has been associated with our Company since inception

Financials of Route Mobile IPO:

(Figures in Crores)
Year Revenue EBITDA OPM PAT NPM Shares F.V. EPS
2018 509 80.2 15.76% 49.4 9.71% 5.685 10 8.69
2019 852 100 11.74% 58.7 6.89% 5.685 10 10.33
2020 968 111 11.47% 74.8 7.73% 5.685 10 13.16
3MFY21 312 40 12.8% 27 8.6% 5.685 10 4.75
Year Long-Term Debts Short-Term Debts Total Debt NW Debt/NW ROE
2018 3.5 77.7 81.2 160 0.51 30.88%
2019 3.9 73.1 77 211 0.36 27.82%
2020 3.7 37.3 41 270 0.15 27.70%
3MFY21 3.7 38.8 42.5 297 0.14 36%

Comparison With Peers:

There are no listed entities in India whose business portfolio is comparable with that of our business.

Recommendation on Route Mobile IPO:

Review and Recommendation of InvestorZone are 5/10. 1. Route Mobile provides a platform through which businesses such banks, e-commerce, aviation, retail, internet/e-commerce, logistics, healthcare, hospitality, media, and entertainment sectors send messages to their clients. In today's world where we order everything online, the SMS market is bound to grow in the coming time. 2. The markets in which it operates are highly competitive. 3. They drive 80% sales from outside India. And have only 20% of income coming from India. 4. The listing gain expected 25-30%. Subscription Details
Day QIB NII Retail Total
1st Day 0.01x 0.46x 1.80x 1x
2nd Day 1.25x 2.04x 6.71x 4.15x
3rd Day 89.76x 192.81x 12.67x 73.30x

Lead Manager of Route Mobile IPO:

  1. Axis Capital Limited
  2. Edelweiss Capital Limited
  3. ICICI Securities Limited
  4. IDBI Capital Market Services Limited

Registrar of Route Mobile IPO:

  1. Kfin Technology Private Limited

Discussion on Route Mobile IPO:

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