RouteSMS Plans to Raise .₹ 500 cr Via IPO

Mes­sag­ing & voice in­ter­face com­pany may di­lute 25-30% stake, use most of the pro­ceeds for ac­qui­si­tions

The Economic Times - - Companies - Deepali.Gupta@ times­

Mum­bai: Mes­sag­ing and voice in­ter­face com­pany RouteSMS ex­pects to raise .₹ 500 crore from an ini­tial pub­lic of­fer­ing (IPO) it plans to launch around Oc­to­ber and spend most of the pro­ceeds on ac­qui­si­tions. Founder Ra­jdip C Gupta told ETthat he is open to di­lut­ing a 2530% stake through the IPO, which is be­ing han­dled by Yes Bank along with Ko­tak Mahin­dra Bank.

The com­pany is yet to file its draft prospec­tus with the Se­cu­ri­ties & Ex­change Board of In­dia (Sebi).

RouteSMS will go on a “string of pearls” ac­qui­si­tion mode, on which it will spend .₹ 400 crore to beef up its tech­nol­ogy and cross-sell­ing op­tions, Gupta said. It would like to ac­quire a dif­fer­en­tia­tor such as a pay­ments com­pany, pos­si­bly a wal­let that it could sell to its cus­tomers, he said. RouteSMS counts 10 ma­jor banks among its clients as it pushes one-time pass­words and alert mes­sag­ing for them. The com­pany’s IPO plans come at a time when the pri­mary mar­ket has re­vived, with 21 of­fer­ings rais­ing .₹ 13,600 crore af­ter a long gap.

Mar­ket ex­perts ex­pect eas­ing of liq­uid­ity from global cen­tral banks to make funds avail­able to pub­lic offe- rings this year.

Seven com­pa­nies, in­clud­ing Equitas Hold­ings, In­fibeam Inc., Bharat Wire Ropes, Health­Care Global En­ter­prises, Quick Heal Tech­nolo­gies, Team­Lease Ser­vices and Pre­ci­sion Camshafts, have launched their ini­tial share sales this year so far.

Thy­ro­care Tech­nolo­gies, a di­ag­nos­tics com­pany, and Ujji­van Fi­nan­cial Ser­vices, a mi­cro­fi­nance lender, are slated to hit cap­i­tal mar­kets next week to raise .₹ 650 crore and .₹ 480 crore, re­spec­tively, through IPOs.

Started in 2004, RouteSMS has grown 150% an­nu­ally over the past two years to hit rev­enue of about .₹ 350 crore, with op­er­at­ing mar­gins near­ing 30%, Gupta said.

The com­pany, started in a metaphor­i­cal garage where Gupta and his brother ini­ti­ated re­selling of bulk mes­sages in­ter­na­tion­ally, em­ploys 300 peo­ple. Although it de­rives 80% of its rev­enue from mes­sag­ing, the com­pany is un­der­go­ing re­brand­ing to in­clude more voice and dig­i­tal ser­vices.

RouteSMS will go into a “string of pearls” ac­qui­si­tion mode, on which it will spend 400 cr to beef up its tech­nol­ogy

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