Route Mobile IPO opens today — Here’s what works for it and what doesn’t

• The cloud communication platform services provider Route Mobile ₹600 crore IPO will open for subscription from today.
• Ahead of the IPO, the company already raised ₹180 crore from 15 anchor investors.
• Here’s what brokerages have to say on Route Mobile IPO.

The cloud communication platform services provider, Route Mobile's ₹600-crore IPO will open for subscription from today (September 9).

Ahead of the IPO, the company already raised ₹180 crore from 15 anchor investors, including Goldman Sachs, Franklin Templeton Mutual Fund, and SBI Life Insurance, Kuwait Investment Authority, Vantage Equity Fund, and SBI Life Insurance, among others.


Under its IPO, Route Mobile will issue 1.7 crore shares. Post the IPO, promoters' stake will come down to 66.3% from the current 96%.

Route Mobile has set an issue price band of ₹345-350 per share, and it is already gaining attraction in the grey market. The grey market premium currently suggests an upside of 42% over the issue price band. It is currently hovering in the range of ₹190-₹200 per share.

What is the grey market premium?

Grey market premium is the measure of the extra amount that investors are ready to pay for a newcomer in the stock market. However, the grey market premium is not an official measure of the market premium. But it is a fair indicator of demand for the shares in the market.

Brokerages on Route Mobile


According to Angel Broking, "Management has till now infused only `6 lakhs capital in the company, and it will command a market cap of ₹1990 crores at the higher price band. This shows that it is a scalable business model, which can grow without capital infusion.” Angel Broking is optimistic about the company’s growth prospects, given the increased adoption of digital technologies.

Ashika Institutional Equities also maintains a ‘subscribe’ call for Route Mobile. “Overall, the company has a history of stable financials, strong return ratios, and positive operating cash flows. Besides, being the only player to be listed in this space, it will garner interest. Hence, investors can Subscribe to this IPO,” the report said.

Risk factors to consider before hitting ‘subscribe’ for Route Mobile IPO

The ICICI Direct report highlighted some key risk factors to consider before one should decide to click on ‘subscribe’

The ICICI report highlighted that Route Mobile’s 10 largest clients accounted for nearly 63% of the total revenue. And, “a reduction in the services performed for such a limited number of clients or the loss of a major client could result in a significant reduction in its revenue.”

Another key concern was raised by HDFC Securities, which said the company is prone to “foreign exchange risks that could adversely affect the results of operations and cash flows.”

In a conversation with Business Insider, Gautam Badalia, Route Mobile chief strategy officer said, “in terms of revenue, 20% of our billing comes in Indian currency. The rest of the billing is in foreign currency. A large part of which is in USD and Euro. Total India revenue will be somewhere around 40% export and domestic business. Rest of which is outside India in foreign places like the UAE, UK, Malta, and Nigeria.”

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