The 459-crore IPO of mobile marketing firm Affle India opened for subscription today. As of 5 pm, Affle India IPO was subscribed nearly 0.30 times. Affle India on Friday said that it raised about 206.55 crore from 15 anchor investors by allotting 27,72,483 equity shares at a price of 745. Affle India has fixed a price band of 740-745 per share. The issue will close on July 31, 2019. Among the 15 anchor investors, Abeerden Asian Smaller Companies Investment and Franklin Templeton Investment Funds subscribed over 3.05 lakh shares each.

Other anchor investors include Goldman Sachs India, Malabar India Fund, among others.

Affle India IPO comprises of a fresh issue aggregating up to 90 crore and an offer for sale of up to 49,53,020 equity shares.

ICICI Securities, Nomura Financial Advisory and Securities (India) are the book-running lead managers to the offer.

Affle India shares will be listed on the National Stock Exchange of India and BSE. The minimum lot size for applying for Affle India shares is 20.

Affle India IPO consists of a fresh issue of 90 crore (20% of the issue size) and an offer for sale of 367-369 crore (80%) by promoter. On a consolidated proforma basis for FY19, Affle reported a revenue of 269 crore and PAT of 52 crore.

According to Centrum Broking, the risk factors for Affle India include “rapid change in digital technology trends, 2) customer concentration (top 10 customers - 64.5% to FY19 consolidated revenue), 3) Reduction in digital ad spends by companies, 4) Emergence of competition."

As on May 31, 2019, the company had 236 full-time employees across offices located in Gurugram, Mumbai, Bengaluru, Singapore, Jakarta (Indonesia) and Dubai (UAE), according to the company's draft red herring prospectus.

What brokerages say on Affle India IPO

Canara Securities

“The company had an EPS of 20.10 and trades at 37.07x P/E for FY19 earnings. It had EV/Sales and EV/EBITDA at 7.17x and 25.29x respectively for FY19. We believe that the stock is fairly valued. On the back of consistent financial performance and potential to scale business, one may subscribe the IPO for listing gains," Canara Securities said in a note.

Centrum Broking

“At higher end of the price band of 745, the issue is priced at P/E of 38.9x (post dilution) on FY19 consolidated basis and 36.7x on proforma basis, which we believe is fully priced. The company has no listed peer. Affle has been building and improving its Consumer Platform resulting in products spanning the entire value chain. In addition, following the acquisition of Vizury, Shoffr and RevX, the service offerings have increased.

“Affle could be a key beneficiary with the ad tech market expected to register global CAGR of 10% to $54 billion and India CAGR of 39% to $808 million over 2017-22 (Frost & Sullivan Report). Expansion of customer base and market penetration could aid volumes of Cost Per Converted User (CPCU). Despite the highly competitive nature of the market, Affle has reported decent financials (PAT 49 crore, RoE 67.4%, debt to equity 0.1x - FY19 consolidated). Being the first of its kind issue and growth prospects, despite mature valuations, investors can subscribe to the issue from a long term perspective," Centrum Broking said in a note.

Angel Broking

“At the upper end of the price band, Affle is valued at PE multiple of 37.1x of FY19 EPS. AIL has no listed peers in India. International peers such as Trade Desk and Criteo trades at 129 & 14 PE respectively. Considering the inherent risk in the business, we have a neutral view. Investors with high risk appetite and short term view can subscribe to the issue for listing gains," Angel Broking said in a note. (With Agency Inputs)

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