IPO

Route Mobile Ltd IPO

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Company Overview -

Established in 2004, Route Mobile Ltd. (RML) is a leading Global Cloud Communications Platform service provider, catering to enterprises, over-the top (OTT) players and mobile network operators (MNOs). Its range of services include messaging, Rich Communication Services (RCS), OTT business messaging, voice, email and SMS filtering, omni-channel communication, analytics & monetization. Its main verticals are (i) enterprise; (ii) mobile operator; and (iii) BPO. As per industry research firms, it is one of the Tier 1 application-to-peer (A2P) service providers.

Route Mobile, among the leading Omnichannel Cloud Communication Service Provider (CPaaS), to enterprises, over-the-top players and mobile network operators. Route mobile has a large client base including world’s social media companies, banking and financial services, aviation, retail, e-commerce, logistics, healthcare, hospitality, telecom sector. Incorporated in 2004, the Company has served more than 30,150 clients since its inception, as of June 30, 2020. The Company has been ranked 2nd Globally as a tier 1 application-to-peer service provider and 1st for value added services amongst tier 1 vendors as per the “A2P SMS Messaging Vendor Performance Report 2017” dated June 2017 prepared and issued by Roaming Consulting Company Limited. The business verticals of the company include Enterprises, Mobile Operator, and Business Process Outsourcing for clients across Africa, Asia Pacific, Europe, Middle East and North America.

Issue Details
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Route Mobile IPO issue will be opening its initial public offering on September 9, 2020 and will close on September 11, 2020, with a price band of ₹ 345 – ₹ 350 per Equity Share. Bids by anchor investors shall be submitted, and allocation to them be will be completed, on September 8, 2020, being one working day prior to the Offer opening date.

The Offer comprises of the Fresh Issue (0.69 Cr shares / Rs240cr) and the Offer for Sale (1.03 Cr shares). Net Proceeds are proposed to be utilized for Debt reduction(Rs36.5cr), Acquisitions and other strategic initiatives(Rs83cr), Purchase of office premises in Mumbai(Rs65cr) and balance for general corporate purposes.

Route Mobile Ltd IPO Subscription Details

Company

Route Mobile Ltd

Issue Type

(Book Built Portion)

Issue Size (In ` Crore)

600

Lot Size

40 Equity shares

Open Date

09 Sep

Close Date

11 Sep

Offer Price

₹345 – ₹350 per Equity Share

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Financials

Consolidated Rs Cr

FY18

FY19

FY20

1Q FY21

Revenue

509

852

968

312

EBIT (%)

15.3

11.5

11.5

12.9

Adj. Dil. EPS (Rs)

9.6

11.2

13.8

5.4

PE(x)

36.6

31.3

25.3

--

ROE (%)

29.7

26.4

25.6

 

Source: RHP, 5paisa Research, Note: P/E is on upper end of price band.

Key Points

Full stack of communication channels and scale

A larger portion of RML’s overall revenues are from Enterprise vertical where it offers enterprise clients cloud communications platform that can be deployed and integrated with their existing business applications and systems. Enterprises use this platform to send communications like OTP, transaction confirmation, updates, etc. Its platform has evolved from traditional A2P SMS or text message solution to other various channel of communications like email, OTT or IP based messaging channel, RCS, enterprise voice application service, interactive voice response, Click2Call, missed call facility, among others. This can be integrated with RML’s super network of 240 Mobile Network Operator (MNOs) which provides its enterprise clients with access to over 800 mobile networks across various geographies. This plays a valuable role as it provides direct and indirect assess to global customers and flexibility to route it in a cost efficient manner. Full stack and scale coupled with growth in cloud-communication space is likely to aid RML in attracting new enterprise customers and drive overall revenue growth.

Solid track record; strong cash generation to aid growth initiatives

By leveraging on its full stack and scale, RML has been able to post a solid revenue CAGR of ~38% over FY18-20. Apart from newer clients, it has been able to successfully scale up its client base (Rs10-25Cr and Rs25Cr+ clients up by 8 and 5 respectively over FY18-20). We believe that steady cross selling and up-selling can provide support to revenue growth going ahead. RML has ~15.5% of its clients on a pre-paid business model while it collects payments from other clients within 30 – 60 days. At the same time, RML pays its MNOs within 45-60 days. This results in negative working capital cycle. Its CFO to EBITDA has improved to 84% level in FY20 from ~35% level during FY18 and FY19. The company has been able to mostly grow organically via internal accruals; a trend we believe is likely to sustain.


Key Risk Factors:

The sectors in which RML operates globally are heavily regulated:

 RML operates in 18 countries and provides services to clients across the world. It is subject to numerous, and sometimes conflicting, legal requirements which may be diverse and vary across geographies.

Client concentration risk:  

The 10 largest clients of RML accounted for approximately 36.1%, 46.0%, 52.5% and 63.7% of revenue from operations in Fiscal 2018, 2019 and 2020 and in the three months ended June 30, 2020, respectively.  Loss of a key client and lower quantum of repeat business from existing clients can impact the revenue and earnings growth.

How to apply IPO on 5paisa app?

  • Login to your 5paisa Mobile Trading App and select the issue in the current IPO section
  • Enter the number of lots and price at which you wish to apply for
  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
  • You will receive a notification to block funds in your UPI app
  • Approve the block request

Route Mobile Ltd IPO Frequently Asked Questions

When will Route Mobile IPO open?

Route Mobile IPO will open on September 9, 2020. The Issue will remain open till September 11, 2020.

What is the lot size of Route Mobile IPO?

Route Mobile IPO lot size is 40 Equity Shares. The minimum order quantity has to be 40 Equity Shares.

When is Route Mobile IPO listing date?

The listing date of Route Mobile IPO is yet to be announced. Sep 21, 2020 is the tentative date however, keep checking the live performance and to know further details about IPO with 5paisa.

How to apply for Route Mobile IPO?

You can apply in Route Mobile IPO online using either UPI OR ASBA as payment method. You can apply for Route Mobile IPO using any UPI ID you can apply using ASBA with netbanking. To know about the process in details, visit 5paisa YouTube Channel.



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Contact Details of Route Mobile Ltd IPO

Company Contact Information

Route Mobile Ltd IPO
4th Dimension 3rd Floor,
Mind Space Malad (W),
Mumbai, Maharashtra 400064.

Phone: 91-22-4033 7676
Email: investors@routemobile.com
Website: http://www.routemobile.com/

Route Mobile Ltd IPO Register

KFin Techologies Pvt Ltd

Route Mobile Ltd IPO Lead Manager(s)

  • Axis Capital Ltd
  • Edelweiss Financial Services Ltd
  • ICICI Securities Ltd
  • IDBI Capital Markets & Securities Ltd
  • Motilal Oswal Investment Advisors Ltd
  • Yes Securities (India) Ltd

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