Route Mobile makes stellar debut, closes 86% above issue price

The stock hit a high of Rs 735 in the early morning deals, thereby surging 110% against the issue price

Route Mobile (RML) made a stellar debut at the bourses on Monday, ending the session at Rs 650, a gain of 86 per cent against its issue price of Rs 350 per share. During the session, the stock hit a high of Rs 735, up 110 per cent against the issue price.

The stock listed at Rs 717, a 105 per cent premium against its issue price on the National Stock Exchange (NSE). On the BSE, shares hit a high of Rs 735, after opening at Rs 708. It touched a low of Rs 625 in intra-day trade on the NSE and BSE.

This is the second public issue in which investors' money more-than-doubled on listing day. Last week, on Thursday, September 17, shares of Happiest Minds Technologies made a similar debut at the bourses, with the stock ending at Rs 371, a 123 per cent gain against its issue price of Rs 166 per share.

The Rs 600 crore-initial public offering (IPO) of RML had received strong response from all catergories of investors. The IPO was subscribed 73.3 times and received bids for 892 million shares against the offer size of over 12.2 million equity shares, data available on the exchanges showed.

The portion of share sale reserved for retail investors was subscribed 12.7 times, while those reserved for non-institutional investors and qualified institutional buyers were subscribed 193 and 90 times, respectively.

RML proposed to utilise the net proceeds towards funding for repayment or pre-payment, in full or part, of certain borrowings of the company; acquisitions and other strategic initiatives; purchase of office premises in Mumbai; and general corporate purposes.

RML is one of the leading providers of cloud-communication platform as a service (CPaaS) to enterprises, over-the-top (OTT) players and mobile network operators (MNOs). It provides voice, email, and omni-channel communication, SMS analytics, firewall, filtering and monetization, SMS hubbing and Instant Virtual Number solutions. It is ranked as a tier one application-to-peer (A2P) service provider internationally and garners nearly 80.1 per cent of its revenue from exports and 19.9 per cent from India.

Most of the brokerages had recommended 'Subscribe' to the IPO given the company’s strong presence in the niche CPaaS market with high entry barriers and healthy financials. Further, given the small offer size and presence in niche IT space, one may get listing gains too, they had said.

The CPaaS platform providers have witnessed traction over the recent years as mobile channels have become increasingly important for brands and enterprises to connect with customers. Analysts expect the trend to continue on the back of rising mobile subscribers globally and growing preference of digitalisation of businesses as well as communication. They expect Route Mobile to be a key beneficiary of this trend.