Infibeam IPO will open for subscription on 21 March and will close on 23 March. In its red herring prospectus (RHP), the Ahmedabad-based e-commerce company said it plans to raise INR450 crore through the IPO. Price band for the public offer has been fixed at INR360-432 per share. The issue will be managed by SBI Capital Markets and Elara Capital (India).
Founded by Vishal Mehta, Infibeam would be the first company from e-commerce sector to get listed in the stock market. It competes with the likes of Flipkart, Amazon, Snapdeal and others in India’s booming but competitive e-commerce space.
Use of proceeds from Infibeam IPO
Since there will be no offer for sale (OFS), Infibeam will get all the proceeds from the IPO. The Ahmedabad-based company plans to use the funds for expanding business, setting up cloud data unit and new logistics centers.
The biggest allocation of INR235.2 crore has been made for a new cloud data centre and purchase of property to house its registered and corporate offices. Nearly INR37.5 crore will be invested in setting up 75 logistics centers while INR67 crore will be used to purchase software. Remaining amount will be used towards general corporate purposes.
It is worth highlighting that Infibeam is taking the listing route to the main exchanges of BSE and NSE, although market regulator SEBI allowed start-ups last year to list on a separate platform.
Old connection with Flipkart
Established in 2007 – the same year when Flipkart and Myntra started – Infibeam operates the infibeam.com website and BuildaBazaar marketplace for enterprise users. On the retail side, the e-retail business included more than 15 million SKUs of products across 40 product categories as of 31 March 2015.
The company has more than 4,000 merchants on Infibeam.com and it claims to serve more than 7.2 million active users. Infibeam has also set up a joint venture with Sony, named Indent, which is focused on digital entertainment. Infibeam holds 74% stake in Indent which powers Jive pre-installed mobile application on Sony smartphones.
Infibeam IPO coincides with the fact that the company has turned profitable now. In the first six months of the current financial year ended September 2015, Infibeam earned INR6.5 crore on revenues of INR171.27 crore. This small profit compares with a loss of INR10 crore for FY2015. This makes Infibeam an interesting play in the e-commerce space. Keep reading IPOCentral to see what latest news and reviews we offer about the prospects of Infibeam IPO.