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.

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

Registrar of Route Mobile IPO:

  1. Kfin Technology Private Limited

Discussion on Route Mobile IPO:

    Lot of big names entered in the route yesterday. So, stay here for long term.

    21-Sep-2020 Route

    GOLDMAN SACHS INDIA FUND LIMITED BUY 4,75,012 705.95 –

    GOLDMAN SACHS TRUST EMERGING MARKETS EQUITY FUND BUY 8,00,908 705.95 –

    GS FDS SICAV GS GLOBAL EMGMKTS EQ PORTFOLIO BUY 11,33,423 705.95 –

    KUWAIT INVESTMENT AUTHORITY A/C KUWAIT INVESTMENT AUTH FD 225 BUY 5,78,504 697.25 –

    *1/4 of the free float* WOW !

    Hi @market wizard i have brought 270 hsares route mobile @731.now 22k loss,shall i hold or sell them tomorrow ? whats ur view?

    0 alloted out of 4 applied..i applied for both ipo on first day got none..does that depend on day applied as well

      It is a good bet for long term as well. But for retail investors it is always good to book profit and exit in IPO.

    Route Mobile to list on the exchanges on *September 21, Monday*

    Symbol – *Route*
    Scrip code – 543228
    ISIN No – INE450U01017

    Expected Listing Gain :- *₹9500+*

    ROUTE MOBILE
    SUBSCRIPTION 02:20 PM

    QIB 28.99 X
    NII 90.75 X
    RETAIL 10.47 X

    TOTAL 32.97 X

    *IPO of Route Mobile Limited*

    Issue Size: *₹600 cr* (at upper end of price band)

    Price Band: *₹345 – ₹350*

    _*Apply for 40 equity shares @ ₹350/-*_

    _*IPO closes on Friday, 11th September, 2020*_

    *Anchor Book (₹180 cr)* had participation from key Marquee Foreign and Domestic Institutional Investors.

    Anchor allocations are as below:

    *₹13.8 cr* each to : SBI MF, ICICI Prudential MF, Goldman Sachs, Kuwait Investment Authority, Birla MF, Axis MF, Nippon MF, Franklin Templeton MF, Vantage Equity Fund and SBI Life

    *₹10.4 cr* each to : Macquarie Asset Management and Theleme Partners

    *₹7 cr* each to : Wells Capital, Mirae MF and IIFL AIF

    *Good investment opportunity!*

    *Lead Manager: Axis Capital*

    Route Mobile has tie-up with third parties and MNOs in particular for connectivity in various regions
    around the world to provide their services to the clients. The business depends on the continuity of the relationship with these MNOs.

    As of June 30, 2020, they have direct relationships with over 240 MNOs and provide enterprise clients with access to over 800 mobile networks.

    EPS post issue on FY20 basis = 13.16

    P/E = 26x

    Mcap = ~2000 Crores.

    Revenue (FY20)= 968 Crores

    Mcap/Revenue = 2.06x

    Debt free company-

    No listed peer

    Subsidiaries of Route Mobile

    1. Sphere Edge Consulting (India) Private Limited;
    2. Start Corp India Private Limited;
    3. Cellent Technologies (India) Private Limited;
    4. Call 2 Connect India Private Limited;
    5. Route Mobile (UK) Limited;
    6. RouteSms Solutions Nigeria Ltd;
    7. RouteSms Solutions FZE, UAE;
    8. Route Mobile PTE Limited, Singapore; and
    9. Route Connect Private Limited

    Stepdown Subsidiaries of Route Mobile

    1. Route Mobile L.L.C, UAE;
    2. Route Mobile Limited, Ghana;
    3. Route Mobile Inc, USA;
    4. Route Connect (Kenya) Limited;
    5. 365squared Limited, Malta;
    6. Route Mobile Nepal Private Limited;
    7. Route Mobile Lanka (Private) Limited;
    8. Route Mobile (Bangladesh) Limited;
    9. Route Mobile Malta Limited;
    10. Route SMS Solutions Zambia Limited;
    11. Route Mobile Uganda Limited;
    12. Spectrum Telecom FZ – LLC.