Market matters: Matrimony.com shares end lower on debut

Shares of Matrimony.com Ltd closed 8.5% lower on Thursday, marking the worst debut on the bourses so far this fiscal year even as the online matchmaker’s ₹500-crore initial public offering (IPO) was subscribed 4.4 times last week.

Matrimony.com shares closed at ₹901.20 on the BSE, on a day when the benchmark 30-share Sensex ended flat at 32,370.04 points. On March 31, shares of CL Educate Ltd had slumped 16.75% on their first trading day.

Matrimony.com stock had opened unchanged on the BSE at ₹985 apiece on Thursday, the same as the upper end of the IPO price band of ₹983-985. Earlier in the day, it touched a high of ₹1,025 and a low of ₹893.20, respectively.

Murugavel Janakiraman, promoter and managing director, attributed the weak debut to the fact that the stock was given to retail investors at a 10% discount.

“We gave a 10% discount to retail investors, and that could be one of the factors,” Janakiraman said in a phone interview.

“We are here for the long term. We are not too concerned about what happened today,” he added.

Brokerage firms had recommended that investors apply for the firm’s IPO due to its unique business, even though it had a poor track record in terms of financials. They expect the recent earnings recovery for the company to strengthen going ahead.

Matrimony.com returned to profitability in fiscal year 2017 after three consecutive years of losses, according to its share sale prospectus. It posted a consolidated net profit of ₹43.8 crore for fiscal year 2017 against a net loss of ₹75.07 crore a year ago. In the June quarter, too, it reported a profit of ₹14.65 crore.

The company’s business comprises two segments—matchmaking services and marriage services. The company operates multiple portals such as BharatMatrimony.com, CommunityMatrimony.com and EliteMatrimony.com.

The company raised ₹130 crore in primary capital through the IPO, while some existing shareholders sold their holdings.