Infibeam eyes $1-billion valuation on listing

Indian e-tailers have raised funds from global private equity firms, but Infibeam has not tapped these investments

Infibeam, an Ahmedabad-based online marketplace, is eyeing a valuation of $1 billion (Rs 6,000 crore) in its proposed Initial Public Offering (IPO).

Infibeam has appointed Axis Bank and Kotak Mahindra Bank to lead its IPO to raise $100 million (Rs 600 crore) by selling 10 per cent of its promoter stake. The draft red herring prospectus is expected to be filed to the Securities and Exchange Board of India (Sebi) next month.

According to people in the know, Infibeam plans pre-IPO fund-raising from a few foreign institutional investors (FIIs). Details are not known. Vishal Mehta, founder and chief executive, Infibeam, said, "We are evaluating the listing plans of Infibeam." He refused to elaborate.

Indian e-commerce companies have raised funds in several rounds from global private equity firms but Infibeam has not yet tapped these. Since 2012, private equity and venture capital firms have invested $5 billion in the Indian e-commerce sector and leaders such as Flipkart and Snapdeal have received more than 70 per cent of the funding.

Started in 2007, Infibeam runs several e-commerce services such as Infibeam.com, its retail platform; BuildaBazaar.ooo, a platform for merchants; Indent, a platform for music labels and digital content; Incept, a travel and ticketing platform; logistics solution ILPL; and Picsquare, photo-printing portal. Last year, Sony Music bought a 26 per cent stake in Indent. Infibeam has an annual turnover of about Rs 250 crore.

"E-commerce companies have gained acceptance and we believe that investor interest will continue in the listed market, as well," said Munish Aggarwal of Equirus Capital. "Recent changes proposed by Sebi will further open capital markets for e-commerce companies and we are witnessing an increased interest to evaluate IPOs by companies in the sector," he added.

According to people in the know, Infibeam will use the IPO proceeds for hiring and expansion in West Asia. It is present in Dubai and Sharjah. Infibeam is expanding its platform with languages such as Arabic to attract business from West Asia and Africa.

Besides, Infibeam is considering acquisitions. Last year, it bought Bengaluru-based digital marketing company ODigMa for $5 million (Rs 30 crore). In 2008, it bought photo-printing portal Picsquare.

Employees own close to 20 per cent of the company and Mehta the rest.

Mehta studied at Cornell University and Massachusetts Institute of Technology, US, and worked with Amazon for five years. He launched Infibeam in 2007.

A recent listing of Etsy, a US-based online marketplace for handmade goods and craft supplies, valued the company at $4 billion.