RouteSMS Plans to Raise .₹ 500 cr Via IPO
Messaging & voice interface company may dilute 25-30% stake, use most of the proceeds for acquisitions
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