IPO: Brokerage Views & Run up to IPO

Matrimony IPO
This post on Limited IPO tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, information on Anchor investors, Subscription etc on Limited IPO and shall be updated continuously till the closure of the issue. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Limited IPO or not.

Related Posts: 
  1. IPO: Comparison with Internet based Services Companies
  2. Limited IPO Review Limited IPO : Allotment Status Click Here Limited IPO: Grey Market Premium etc.

13/09/17  Grey Market Premium  Rs. 10-20 (no Deals), No kostak
09/9/17 Grey Market Premium Rs. 100  ,  Kostak (Application rate) –  Rs. –

Subscription: Limited IPO ( x times)
  QIB NII Retail Total
Day 3  1.88  .41  18.16  4.44
Day 2   0.83 0.02 4.97  1.36
Day 1 0.83 0.0 1.19 0.67

Complete Anchor List

Under the Anchor Investors (AIs) portion in the Public Issue of Limited, 22,93,277 equity shares have been subscribed by 8 Anchor Investors at Rs. 985/- per equity share.  While a third of the anchor allotment went to Smallcap World Fund Inc. Other investors included HDFC Prudence Fund, BNP Paribas Arbitrage and Goldman Sachs HDFC Mutual Fund,  Baring Private Equity India AIF. Click here for Complete Anchor List

Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on Limited IPO .

Angel Broking: “ Going forward, we expect the company to perform better on top-line and bottomline front considering strong brand value, leadership position, robust technology and expansion into marriage services segment. Further, it has strong user data base, which provides competitive edge to the company. At the upper end of the price band, the pre issue P/E multiples works out be 35.7x of 1QFY2018 Annualized EPS, which is lower compared to peers (Info edge is trading at 46.4x its 1QFY2018 Annualized EPS). Hence, we recommend ‘SUBSCRIBE’ on the issue for a mid-to-long term period..”

Ashika Direct
: ” The company intends to continue to drive profile registrations and expand its user base by enhancing its user experience and engagement to ensure that existing users continue to visit, and new users are attracted to visit, its websites, mobile sites and mobile apps and that both existing free users and new users subscribe to its paid services. The company also intends to deepen its geographic penetration across all parts of India and continue to drive registrations through its mobile platform. Losses incurred in fiscal years 2016, 2015 and 2014, and in the event that it incur losses in future periods make the issue risky but, strong consumer brand along with efficient business model makes it a long term bet

Choice Equity Broking : “Post IPO, we are expecting that Matrimony would have a RoE and RoCE of 48.7% and 48.2%, respectively, as compared to the peer average of 6% and 7.1%. The demanded P/E ratio of 46.2x is very aggressive as compared to the peer average. We are of the opinion that all the positives such as leadership position, higher profitability and return ratios are been factored in the share price, thereby leaving no room for price appreciation for the retail investors. Thus considering the above observations, we assign a “AVOID” rating for the issue.”

Capital Market: “At a higher price band of Rs 985, the diluted equity share capital of the company stands at Rs 11.29 crore of face value of Rs 5 each. On this diluted equity, adjusted EPS for FY 2017 works out to Rs 21.3. The scrip is offered at P/E multiple of around 46.2 times FY 2017 earnings.There is no directly comparable listed player and the company will enjoy the benefit of first listed player in the fast growing and high potential matchmaking segment, but how much of this potential is already in the offer price will be visible only after listing.”

GEPL Capital: “ Limited (Matrimony) stands to gain from operating leverage. At a P/E of 49.25 xs of FY17 EPS. We believe that Limited has a unique business model and strong growth metrics which will make them lucrative. We assign a Subscribe rating to the IPO. Financial.

India Infoline: “IPO proceeds are expected to be gainfully utilized leading to higher revenues from increased brand awareness and lower rentals and interest expenses. Focused expansion of its marriage services business through cross selling and assisted services could also help the company move up the value chain. The stock is available at ~51x FY17 P/E with a 10% discount to retail investors. It may be noted that the nature of the business is not comparable to that of Just Dial and Info Edge. We recommend Subscribe for listing gains.”

KR Choksey: “The company has recorded an FY17 EPS of INR 21.3 based on post-issue number of shares. At a higher price band INR 985, the company is trading at FY17 P/E multiple of 46.2x which is considerably high given that comparable peers such as Just Dial are trading at 30.2x FY17 multiple. However, given its nature of an Internet company, leading position in the online Match-making services industry, presence in a promising industry and higher profitability compared to Just Dial and Info Edge (Net Loss as of FY17), we believe that the companycommands a higher multiple . Additionally, we believe that negatives such as settlement of lawsuit with US counterpart have been factored-in and therefore EBITDA and PAT have grown at a CAGR of 38% and 43% between FY13 and FY17, respectively. Taking into consideration the above mentioned factors, we have a SUBSCRIBE rating on the stock.”

Nirmal Bang:Over FY13- FY17, the company sales have grown at a CAGR of 11.6% however, Ebitda has grown at a CAGR of 38.6%. EBITDA in FY17 was higher on account of restructuring steps taken by the company, improving the overall CAGR for the period mentioned above. Ebitda margins in FY17 improved drastically by 1758 bps to 20.2% from 2.6% in FY16. In Q1FY18, Ebitda margins came in at 23.3%, which indicates margins are going to be sustainable going ahead. There was a litigation filed against the company for which the company had to pay a sum of USD $8,000,000 in full settlement which was leading to loss to the company. As per the management, this litigation has been factored in the P&L. Adjusting to this from FY13- FY17 PAT has grown at a CAGR of 40.8%. Being an internet user company the capex requirement by the company is less. Other than this, Ebitda to Cash flow from operations is around 85% indicating lower working capital requirement by the company. Going forward, shift from unorganized to organized sector and already having high database we expect the company to maintain its No1 Position even going ahead. Other than this, with increase in internet penetration & easy availability of sites we expect the number of visitors to increase going ahead and in turn fuel in growth to the company. Apart from this, the company’s new marriage services business (currently loss making) is likely to gain traction with cross selling opportunity available .On the valuation front, at the given upper price band of issue of Rs 985, is offered at PE of 38x, EV /EBITDA of 27.6x and EV/Sales of 6.4x for Q1FY18E annualized EPS, EBITDA and sales respectively which looks attractive considering its leadership position and as compared to its peer. We recommend subscribing to the issue.”

Religare : “ Ltd reported subdued Net sales CAGR of 12.5% over
FY13-17. However, cost optimization and well planned business strategy were key drivers of improvement in EBITDA at a CAGR of 74.3% over FY13-17. The company is at an inflection point, with 15% YoY and 792% YoY Net sales and EBITDA growth respectively in FY17. With over a decade of expertise in matrimony related services, The company is one of the fastest growing online matchmaking service providers. However, fragmented industry structure and dependence on ever-changing technology weigh on future growth prospects. Higher advertising spends (~18% of Net sales), in-line with increasing competitive landscape, could dampen overall margins. At the upper end of price band of Rs 985, the stock is trading at 51x P/E on FY17 EPS.”

SSJ Finance: “ Ltd has reported a CAGR of 11.6% and 38.6% on the sales and EBITDA fronts respectively over FY2013-2017. On its upper band of price of Rs 985, the issue is priced at P/E ratio of 30.7x of its Q1FY2018 annualised EPS of Rs 32.1. We believe that the IPO is overpriced leaving little for the investors. Hence, we recommend to Avoid the IPO.”

SP Tulsiyan website: “Despite being in the business for nearly 2 decades, financial has not been achieved, which is a huge risk for any prospective investor. Fundamentally speaking, fluctuating margins, negative networth, unconvincing issue objects and expensive valuations make this IPO risky and hence an avoid.”

Ventura Securities: ” The valuation on a trailing basis works out to 47.8 and 47.7 FY17 PE at the upper and lower ba
nd. For the retail segment the valuation works out to 43.0 / 42.9 (upper band / lower band) FY17 trailing PE. We recommend a subscribe for listing gains.”

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