Route Mobile seeks $272 mn valuation in IPO

By Ankit Doshi

  • 04 Sep 2020
Credit: VCCircle

Messaging and voice application programming interface company Route Mobile Ltd is seeking a valuation of Rs 1,990 crore ($272.08 million at current exchange rates) through an initial public offering (IPO) beginning next week.

The company has set a price band of Rs 345-350 per share for its IPO that opens on 9 September, with the anchor book opening one day prior. The public offering closes on 11 September.

The IPO comprises fresh issue of shares worth Rs 240 crore and an offer for sale (a secondary market transaction) worth Rs 360 crore by promoters Sandipkumar Gupta and Rajdipkumar Gupta.

The IPO will result in 30.15% stake dilution on a post-issue basis at the upper-end of the price band.

ICICI Securities, Axis Capital, Edelweiss Financial Services, and IDBI Capital Markets & Securities are merchant bankers managing Route Mobile’s IPO.

Mumbai-based Route Mobile had refiled its IPO on 30 September last year after its earlier attempt to go public proved futile. VCCircle was the first to report about the company’s IPO plans in early 2018.

The company had filed its IPO plan in January 2018 and received a green signal in August 2018.

Route Mobile 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.

In December 2010, One97 Communications Ltd, the parent of e-payments and e-commerce firm Paytm, had filed a draft prospectus with SEBI for an IPO but shelved its plans citing volatile market conditions.

Route Mobile, formerly RouteSms Solutions Ltd, was founded in 2004, with offices in Mumbai, Pune and London. Today, it also has offices in Canada (Toronto), Congo, Nigeria (Lagos), and the UAE, besides Hyderabad and New Delhi. It employs close to 300 people.

The company will use Rs 36.5 crore towards repayment and advance payment of certain borrowings, Rs 83 crore for acquisitions and other strategic initiatives, Rs 65 crore for the purchase of office premises, and an undisclosed amount for general corporate purposes.

The firm had acquired Mumbai-based Cellent Technologies in July 2016.

Cellent Technologies, which was part of the Goel Group and has a presence in the application-to-person messaging markets of West Asia and Africa, was Route Mobile’s first acquisition. After that, Route Mobile acquired Defero Mobile and Call2Connect, before buying Malta-based SMS firewall solutions company 365squared.

The company caters to the requirements of the mobile communications industry, offering solutions and services to mobile network operators, enterprises, over-the-top content firms, SMS aggregators and resellers.

Its solutions include an SMS firewall, which monitors and controls large quantities of SMSes sent to one or multiple destinations. The company also monitors the content of SMSes and filters messages based on defined keywords, rules, subscriber identity and locations to prevent spoofing.