Route Mobile Listing
Cloud Communication Services Provider Root Mobile has a strong entry into the stock market. The company’s stock is listed in the market with a premium of 102 per cent. The issue price of the stock was kept at Rs 350. While it was listed at Rs 708 on BSE. At the same time, the share of Root Mobile on the NSE was listed at a price of Rs 717 with a premium of 105 per cent. That is, the investors who had invested money in the issue, their money doubled in less than 2 weeks. Explain that this issue was open for investment from September 9 to September 11. It got a great response from the investors.
Shares have broken up by 110%
Root Mobile’s stock rose 110 percent from the issue price to Rs 735 in today’s trading. However, there was some fall in the stock after this. Right now the stock is trading at Rs 648.25, down about 8.5 percent from the listing price on BSE. At the same time, on the NSE it has come at a price of Rs 653.35.
What was the price band?
The company had set a price band of Rs 345–350 per share for the IPO. The lot size was 40 shares, that is, we had to apply for at least 40 shares. After this issue, the promoters’ stake in the company will fall from 96 per cent to 66 per cent. The company will use the proceeds from this issue to reduce debt, buy offices and make strategic acquisitions.
Learn about the company
The company was started in the year 2004. The company primarily serves as an omnichannel cloud communication service for OTTs and mobile network operators (MNOs). The company has a large customer base including the world’s largest social media companies, banking and financial services, aviation, retail, e-commerce, logistics, health, hospitality and telecom sectors.
Financial performance of the company
The company’s revenue stood at Rs 309.6 crore for the quarter ended June 30, compared to Rs 956.2 crore for the financial year 2019-20. During the financial year 2017-18 to 2019-20, the company’s revenue reached Rs 956.3 crore with a growth of 37.6 percent. Net profit of the company increased to Rs 69.1 at 21.6 percent.
What to say about the expert?
According to Nirali Shah, Senior Research Analyst, SAMCO Securities, the growth of Root Mobile has been very good for the last 2 years. Both profit and revenue saw spectacular growth. But there are some factors which can affect the long term growth of the company. Its core business communication is based.
Therefore, the company is going to get tough competition from other big companies in this sector. The liabilities are still very high on the company’s books, which is about 55 percent of the balance sheet. This may lead to working capital stress. Long term investors should avoid investing now. This IPO is suitable for investors with high-risk appetite.
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