Messaging and voice application programming interface company Route Mobile Ltd has filed a draft prospectus with the Securities and Exchange Board of India for an initial public offering.
VCCircle had reported last week that the company was working with merchant bankers and getting ready to file its draft IPO proposal. The total IPO size is estimated at Rs 600 crore ($94 million), people in the know told VCCircle.
The IPO and subsequent listing will make Route Mobile the first company in the mobile communication services space to go public.
In December 2010, One97 Communications Ltd, the parent of e-payments and e-commerce firm Paytm, had filed a draft prospectus with SEBI for a Rs 120 crore IPO but subsequently postponed its fundraising plans, citing volatile market conditions.
Here’s a snapshot of the proposed IPO:
Issue
The total IPO size is estimated at Rs 600 crore ($94 million), people in the know told VCCircle.
The company has proposed to issue fresh shares worth Rs 350 crore. Besides, promoters Sandipkumar Gupta and Rajdipkumar Gupta will sell 6.5 million shares.
Use of proceeds
Route Mobile will use Rs 77 crore out of the net proceeds to repay debt, Rs 75 crore for acquisition and other strategic initiatives, Rs 80 crore to purchase office premises in Singapore and London, and Rs 20 crore to set up a business outsourcing centre in Noida. The remaining amount will be used for general corporate purposes.
Bankers
Motilal Oswal Investment Advisors, IDBI Capital Markets & Securities and Yes Securities (India) are managing the IPO.
Lawyers
Crawford Bayley & Co and Squire Patton Boggs Singapore LLP are domestic and international legal advisors, respectively, in the IPO.
Company
Route Mobile was incorporated in 2004. It is among the leading cloud-communication platform service providers to enterprises, over-the-top players and mobile network operators.
Its service offerings include messaging, voice, email and SMS filtering, analytics and monetisation. It caters to sectors such as banking and financial services, aviation, retail, e-commerce, logistics, healthcare, hospitality, media and entertainment, pharmaceuticals and telecom.
Route Mobile claims to have more than 23,000 clients as on 31 December 2017.
The company ranked second worldwide as a tier-1 application-to-peer (A2P) service provider, and ranked first for value-added services (VAS), implementation process and uptime performance, according to ROCCO, a consulting and independent research company in the telecommunication industry.
Route Mobile operates through eight direct and seven step-down subsidiaries serving its clients in 15 locations across Africa, Asia Pacific, Europe, Middle East and North America.
As part of its strategy of pursuing inorganic growth, the company had acquired Mumbai-based Cellent Technologies in July 2016.
The company then acquired Defero Mobile and Call2Connect, before buying Malta-based SMS firewall solutions provider 365squared for Rs 100 crore. 365squared operates in SMS filtering, analytics and monetization segments.
Route Mobile’s business can be classified in three parts—enterprise and OTT, mobile operator and business process outsourcing.
Its enterprise and OTT vertical provides cloud-communication platform services to enterprises. These services include A2P messaging, enterprise email sender and voice application services. Other voice services include interactive voice response, missed call facility, outbound dialer and international wholesale voice services.
Its services to mobile operators include SMS filtering, analytics and monetisation, and hub solutions. Through its BPO vertical, the company provides a range of voice, non-voice and consulting services.
Financials
Route Mobile reported consolidated net profit of Rs 27.11 crore for the six months ended September 2017 on revenue (from operations) of Rs 191.85 crore.
The company’s net profit stood at Rs 60.63 crore for 2016-17 and Rs 62.73 crore in the preceding year. Its revenue stood at Rs 457.58 crore in 2016-17 and Rs 367.39 crore in the year prior.
