Indo-China tensions pull back grey market premium of Route Mobile

Grey market premium for shares of Route Mobile dropped as the IPO entered the second day of subscription on Thursday. The omni-channel cloud communication service provider plans to raise up to Rs 240 crores by issuing fresh equity and up to Rs 360 crore through an offer for sale (OFS) by the promoters. The issue is open for subscription till September 11, Friday.

The grey market witnessed a frenzy ahead of the stake sale with the premium reaching Rs 175-180 a share on Monday evening. However, dealers of unofficial markets turned cautious as volatility increased in the secondary market amid geopolitical tensions.

Abhay Doshi, a Gujarat-based independent dealer of unlisted shares, said the Sino-India face-off has led to uncertainty in the markets, leading the premium stabilizing at current levels. “However, the primary market still fancies the issue,” he said. “The IPO is worth investing for listing gains as well as long-term holding, for those who have a high risk appetite and who want to cash in on a unique business model in a rapidly growing digital communication sector.”

Dealers are comparing Route Mobile issue with that of Affle India and IndiaMART Intermesh, which have a niche business model in B2B client servicing. Mumbai-headquartered Route Mobile commenced its Operations in 2004. It offers various communication solutions, including firewalls filtering and analytics for messaging services, voice, email and business process outsourcing (BPO) to enterprises, mobile operators and provides over-the-top (OTT) content providers across 18 countries.

Dinesh Gupta of UnlistedZone, a Delhi-based firm that deals in unlisted shares, expects superior level of subscription by retail investors due to much of liquidity in the global markets. "The whimsy are pivotal in an IPO as the investors put their money for listing pop. Strong Fundamentals and Robust balance sheet to the craze to own it," he said.

Gupta said after the recent runup, valuations are stretched in the secondary market and there are a handful of options left. That is why investors direct their money to primary markets to get the adrenaline rush on the day of listing.



Route Mobile earned total revenue of Rs 968.10 crore for FY20 on the back of Rs 852.37 crore in FY19. Profit after Tax (PAT) surged to Rs 54.53 crore to Rs 69.10 crore during the period. In the June quarter, 2020, the company managed total revenue of Rs 312.29 crore, of which 85 per cent was from exports. Net Profit during the quarter was Rs 26.93 crore.