Messaging and voice application programming interface company Route Mobile Ltd made a blockbuster debut on the stock exchanges on Monday as its shares more than doubled on listing, before paring the gains on profit-taking.
Route Mobile emulated Happiest Minds Technologies Ltd, whose shares also more than doubled on listing last week.
Shares of Route Mobile began trading on the BSE at Rs 708 apiece compared with the initial public offering price of 350. The stock touched a high of Rs 735 and a low of Rs 625. It eventually closed at Rs 651.10, clocking a gain of 86%.
The BSE’s benchmark Sensex declined 811.54 points, or 2.09%, to close at 38,034.14 on Monday.
Route Mobile’s spectacular debut follows an IPO that was covered 73.3 times with heavy demand from all categories of investors, with the issue receiving full subscription on the first day itself.
Route Mobile is the fourth company to list on the main board of the stock exchanges this year. SBI Cards and Payment Services Ltd, which went public in March, had received a very strong response to its IPO but had a subdued listing. Speciality chemicals maker Rossari Biotech Ltd went public in July and its shares listed at a 58% premium.
Mumbai-based Route Mobile now commands a market capitalisation of Rs 3,701.97 crore compared with the Rs 1,990 crore valuation it had sought through its IPO.
The IPO comprised a fresh issue of shares worth Rs 240 crore and an offer for sale worth Rs 360 crore by promoters Sandipkumar Gupta and Rajdipkumar Gupta. It resulted in roughly 30.15% stake dilution on a post-issue basis at the upper end of the price band.
The company does not have a directly comparable listed peer in India. The company will become the second firm in the larger mobile communication services segment to go public.
Singapore-based Affle Holdings Pte. Ltd, which provides mobile commerce and marketing solutions for consumers and businesses, went public in July 2019. Its shares made a positive debut on the stock exchanges.
Route Mobile, formerly RouteSms Solutions Ltd, was founded in 2004. It has offices in Mumbai, Pune, Hyderabad, New Delhi, London, Toronto, Lagos and in the UAE. It employs close to 300 people.
The company will use Rs 36.5 crore to repay debt, Rs 83 crore for acquisitions and other strategic initiatives, Rs 65 crore to buy office premises, and an undisclosed amount for general corporate purposes.