Route Mobile Closes 86% Higher On Stock Market Debut

Route Mobile Ltd.’s stock rose sharply on its market debut as investors piled in expecting to gain from rapid adoption of digital services.

Shares of the Mumbai-based email, voice, messaging and analytics services provider opened trading at Rs 733.95 apiece, a 110% premium to the issue price of Rs 350. The stock then moderated slightly to close 86% higher at Rs 651.1 apiece.

This is the second listing this month after Happiest Minds—the best debut in nearly a year—and fourth since the Covid-19 pandemic disrupted the economy.

Route Mobile's initial public offering was subscribed 74.36 times on the final day of bidding on Sept. 11. The issue received 89.23 crore bids against the 1.2 crore shares on offer. The demand was led by non-institutional investors, the portion reserved for which subscribed 195.61 times. Institutional investors bid 91.06 times on shares earmarked for them, while the retail category subscribed 12.85 times.

As many as 15 anchor investors, including SBI Mutual Fund, Nippon India, ICICI Prudential, Goldman Sachs, Franklin Templeton, Kuwait Investment Authority, among others, were allotted 51.43 lakh shares at Rs 350 apiece aggregating to Rs 180 crore, ahead of the IPO.

The company in its red herring prospectus had said it would use the proceeds from the share sale to repay debt, pursue strategic initiatives and purchase office premises in Mumbai.

Route Mobile expects its revenue to grow at 30-35% in the fiscal ending March 2021, benefiting from the consolidation in the telecom sector and digital transformation of entities.

After the IPO, promoter shareholding in the company fell to 66.33% from 96%. Tanla Solutions Ltd. is the company's closest competitor.