Salebhai Internet Limited IPO

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Salebhai Internet Limited IPO
(i) Mr. Vishwavijay Singh, Mrs. Purba Kalita, and Mr. Anand Varani 
have identified a market gap, wherein people migrating within Indian and abroad and goods representing their culture were mostly in short supply. After studying migration trends among Indian citizens, they observed that most people moved to fast-growing cities like Ahmedabad, Bangalore, Chennai, Delhi,Kolkata, and Mumbai – either due to employment opportunities, education, or marriage. The data on migration in the 2011 Census also revealed that 2 out of every 5 Indians are migrants, which makes for a whopping 40% Diaspora population.

(ii) So they quickly see this as an opportunity and to cater this, the E-commerce business was launched on 15th September 2015 under the brand of Salebhai Internet.

(iii) Salebhai.com is an Indian e-commerce portal that enables people living away from home order a range of specialties directly from their hometowns. It is also a one-stop solution for those who want to discover regional products from across India. People can pick from a wide variety of delicious consumable items like Sweets, Namkeen, Chocolates, Bakery, Spices, Dry fruits, Beverages, and Pickles. Salebhai also offers other products such as Handicrafts, Paintings, Puja items, Handloom goods, and Herbal & Wellness items.

(iv) As on date they have 8500 products sourced from over 100 cities and 300 select vendors, the company provides people with an opportunity to buy products in various categories from sellers across India as well as discover new items from different communities and cultures.

Objects of the Salebhai Internet Limited IPO:

Objective of

Salebhai Internet Limited IPO

are: 1. Operating Expenditure 2. Customer Acquisition 3. IT Development 4. General Corporate Purpose 5. Brand Building Promotion 6. Issue Expense

Salebhai Internet Limited IPO Details:

Open Date: Jul 27 2018
Close Date: Aug 02 2018
Total Shares: 22,59,600
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price IPO
Issue Size: 23.72 Cr.
Lot Size: 1200 Shares
Issue Price: ₹ 105 Per Equity Share
Listing At: BSE SME
Listing Date: Aug 10 2018

Promoters And Management:

Promoters of Salebhai Internet Limited IPO Company are: (i) Mr. Vishwavijay Singh, aged 41 years is the Managing Director & Chief Executive Officer of the Company. He has completed his Master of Business Administration (MBA) from the University of Gujarat. He has 19 years of post qualification experience in sales & marketing in companies such as Airtel, Nerolac & ICICI Lombard. He was part of the retail team at ICICI Lombard (as Vice President motor business) which grew from $10m to $400m in six years. (ii) Mr. Anandprakash Varani, aged 49 years is the Executive Director & Chief Financial Officer of the Company. He is one of the promoters and Co-founder of the Company. He has completed Postgraduate Diploma in Business Management (PGDM) from Nirma Institute of Management and LLB from Gujarat University. He has more than two decades of work experience in diverse industries, including 10 years in Finance. He has worked with companies such as Electrotherm, Mannesmann Rexroth (currently known as Bosch Rexroth), Airtel & Axis Bank's asset division. (iii) Mrs. Purba Kalita, aged 42 years is the Executive Director &Head of Content & Communications Department of the Company. She is one of the promoters and Co-founders of our Company. She has completed M. Phil (Comparative Literature) from School of Languages, Gujarat University. She has more than 18 years of experience in content development. She was a journalist for 12 years, 9 years of which with The Times of India. In 2012, she moved to business communications and worked closely with the team that launched Flip kart Marketplace. She handles overall communication, content development, social media, campaigns & PR activity of the company.

Capital Structure:

(i) Authorized Share Capital 90,00,000  Equity shares at FV@10) 9 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (62,41,510 Equity Shares at FV@10) 6.241 Cr
(iii) Present Issue (   22,59,600 Equity Shares at FV@10) 2.259 Cr
(iv) Reservation for Market Maker 1,16,400 Equity Shares at FV@10) 11.64 Lacs
(v) Reservation for QIB & HNI 10,71,600 Equity Shares at FV@10) 50%
(vi) Reservation for Retail 10,71,600 Equity Shares at FV@10) 50%
(vii) Paid Up Share Capital after the issue 8.5 Cr

Financials of Salebhai Internet Limited IPO:

Particulars For the year/period ended (in Rs. Lacs)
31-Jan-18 31-Mar-17 31-Mar-16
Total Assets 664.03 97.05 10.57
Total Revenue 113.29 46.02 3.7
Profit After Tax -159.87 -288.11 -111.19
Key Note: 1 The Company has shown excellent growth in terms of Revenue and it went from 3.7 Lacs in FY16 to 1.13 Cr in FY18. 2. However, the Revenue growth has not been able to translate into bottom- line and company is posting losses continuously from the day of beginning. 3. The company has negative EPS and ROE. 4. The P/E is also negative. 5. The Pricing looks aggressive based on financial performance.

Comparison With Peers:

There is no listed business which can be strictly compared with the company.

Recommendation on Salebhai Internet Limited IPO:

We don't know when the company will get into profit. The E-commerce giants  Flipkart and Snapdeal formed many years back are still struggling to get into profit. Very tough competition is there in the E-commerce business. Continous infusing of money is required for good marketing and offers as compare to its rival to be remain floating in the market. We all have seen how Snapdeal and Flipkart business got hampered after the entry of Amazon. In the future, we gonna see all these small businesses being acquired by big players and will have 2-3 players ruling the market. Salebhai Internet Limited IPO Rating by InvestorZone team => 3/10 1-5: Fair 5-7: Good 7-10: Excellent Next Upcoming IPO > Lodha Developers

Lead Manager of Salebhai Internet Limited IPO:

  1. Monarch Networth Capital Limited

Registrar of Salebhai Internet Limited IPO:

  1. Skyline Financial Services Private Ltd

Company Address:

Salebhai Internet Limited 307-A,C/o Safal Pegashis, Opp. Kiran Motors, 100ft Road, Opp: Rivera Bunglows, Prahalad Nagar,Vejalpur Ahmedabad Gujarat – 380015. Phone No: 079 - 4899 9917, E-mail: compliance@salebhai.com Website: www.salebhai.com

25th Sep 2018 - 27th Sep 2018 => Aavas Financiers IPO

Discussion on Salebhai Internet Limited IPO:

    GOOD to see issue withdrawn. such loss making company not deserve to get subscription anyway.
    multiple profit making and good sme are available in secondary market at good rates.
    this will teach a lesson to LM not to get such kind of issues

    The Subscription figures till date are not encouraging. Looks people are avoiding this issue.

    Very risky bet.
    consider posting losses and negative P/E it is avoid for me.
    it would be better to take a call at some later stage post listing if the financial gets better.
    Avoid

    The logic of Pricing the Salebhai IPO at Rs.105
    1. The Bennett Coleman and Co. Ltd. (Times Group) has invested Rs. 15000 on 30th July 2016 in Salebhai and in return company has issued 1500 Equity Shares at Rs.10.

    2. Then again on 18th Jan 2018, Bennett Coleman and Co. Ltd. (Times Group) had invested 6.50 Cr in Salebhai and in return company has issued 68421 Equity Shares at Rs.950.

    3. Now just before the IPO, the company has issued 6,15,879 bonus shares to Bennett Coleman and Co. Ltd. (Times Group) on 30th March 2018. So ultimately, the Bennett Coleman and Co. Ltd. (Times Group) now has total shares 684310 Equity Shares at Rs.95 each.

    Now you can see how they have done pricing of IPO Rs.10 up from the average price of acquisition of Bennett Coleman and Co. Ltd. (Times Group).

    Salebhai is issuing 22,59,600 equity shares which are equivalent to 26.58% of the company’s equity. The company is in losses in the last three years, so it is hard to judge the valuation at which the company is coming. However, we came to know that the Salebhai is backed by The Times of India Group. If they able to successfully raise money then this would be the first B2C e-commerce company to raise money from an IPO.

    The average cost of acquisition of Equity Shares by the Promoters is set out below:
    Mr. Vishwavijay M. Singh holds 24,92,220 Equity Shares at Rs. 4.48/-
    Mr. Anandprakash Varani holds 6,47,930 Equity Shares at Rs. 3.62/-
    Ms. Purba Kalita holds 2,00,000 Equity Shares at Rs. 1.00/-

    The company’s business requires high working capital for smooth day to day operations. To run the high working capital business company should able to produce sufficient cash flows else they have to seek other means of getting credit which may put pressure on the margins.
    As per financials, the company has negative cash flows from operations in last 2 years, so how they gonna manage their working capital is a big question to answer going forward.

    It is founded in 2015 and till date, the company is in losses.

    SOME OF THE ONLINE REVIEWS OF THE PRODUCTS SOLD ON SALEBHAI.COM WHICH I FOUND ON GOOGLE.
    (i) Rama Alwar 
    Please don’t ever buy from this site. I made an order on 4th August 2017. More than one month passed, they didn’t ship my order and even after requesting for cancellation of my order they didn’t refund the money. Cheaters. They don’t post negative reviews on their site which I posted. I think they post positive reviews by themselves.

    (ii) Lourdu Vinoth
    India’s very worst online shopping because very bad customer service and this online shopping provide customer care number doesn’t work and customer care email doesn’t respond so this is online shopping? One month after still not dispatch order and some orders force to canceled. Bad experiences.

    (iii) Testing Testing
    Very Poor quality of product. Don’ t waste your money go to your near and buy sweets and else what you need. Website’s Product price is triple with the actual MRP price.

    (iv) ALL ABOUT STRENGTH
    Very Bad experience ordered for 800gm sweets(Bal Mithai) and received one box of the only 400gm and no one is picking the phone on the helpline for the refund of money. very bad service.