Only retail investors participated in the bidding process, with their quota subscribed as much as 25 per cent, whereas the quota for institutional buyers and non-institutional investors did not see any bids thus far.
One97 Communications is selling its shares in the range of Rs 2,080-2,150 apiece, with a face value of Re 1 each. Investors can bid for a minimum of 6 shares and in the multiples thereof.
The IPO will raise fresh equity worth Rs 8,300 crore, whereas existing shareholders are offloading shares worth Rs 10,000 crore via offer for sale route.
The Rs 8,235-crore anchor allotment, a 10 times subscription, and the likes of Blackrock, CPPIB and GIC lining up for the allotment tells a story.
With the anchor round, 45 per cent of the issue is already subscribed, and the chances are good that the issue will sail through, given that 75 per cent of the IPO is reserved for qualified institutional buyers (QIBs).
Long-term investors, who wish to bet on digitisation of payments, investments & financial solutions, and are willing to ignore likely losses and tough competition in the foreseeable future, could look to subscribe to the issue.
Richa Agarwal, Senior Research Analyst at Equitymaster said, though it was unfashionable to talk of profits in tech companies, a lot was left to be desired even on growth parameters in this case. In FY21, the year of the pandemic, when use of digital wallet and mobile payments surged, the company posted a decline in the revenues, Agarwal said.
“Despite a 60 per cent cut in marketing and promotional expenses, the losses continued and the road to profitability is unclear. While it’s highly likely to be a successful IPO, from a long-term perspective, this seems more like a speculative than a prudent investment bet,” she added.
