IndiaMART InterMESH Limited

Started in 1999, IndiaMART InterMESH Limited is a New Delhi based India's largest online B2B marketplace for business products and services with approximately 60% marketshare of the online B2B classifieds space in India in fiscal 2017, according to KPMG. Company primarily operates through the product and supplier discovery marketplace, www.indiamart.com or 'IndiaMART'. The online marketplace provides a platform for mostly business buyers, to discover products and services and contact the suppliers of such business products and services. IndiaMART had an aggregate of 325.8 million, 552.6 million and 723.5 million visits in fiscal 2017, 2018 and 2019, respectively, of which 204.8 million, 396.9 million and 550.3 million comprised mobile traffic, or 63%, 72% and 76% of total traffic, respectively. As of March 31, 2019, company had 82.70 million registered buyers, and they had 5.55 million supplier storefronts in India. These Indian supplier storefronts had listed 60.73 million products, of which 76% of goods comprised products and 24% were services. They refer to an enquiry placed by buyers on IndiaMART through telephone, SMS, email or by posting an RFQ as a 'business enquiry'. A total of 156.84 million, 289.95 million and 448.97 million business enquiries were delivered to IndiaMART suppliers in fiscal 2017, 2018 and 2019. For the years ended FY18 and FY19, they had 52.59 million and 72.52 million daily unique buyer requests, of which 52% and 55% were repeat buyers calculated on the basis of the past 90 days. IndiaMART provides a robust two-way discovery marketplace connecting buyers and suppliers. Buyers locate suppliers on the marketplace, including both Indian small and medium enterprises, or 'SMEs', and large corporates, by viewing a webpage containing the supplier's product and service listings, or a 'supplier storefront', or by posting requests for quotes called 'RFQs' or 'Buy Leads'. Company's marketplace offerings from which buyers can search for and view product and service listings cover a widespread range of industries spread across India, rather than relying on a single target industry or type of geography. As of March 31, 2019, they had organised the listings across 54 industries. As at March 31, 2019, IndiaMART had 3316 employees. As per financial performance, IndiaMART has posted total income/net profits of Rs. 331.94 cr. / Rs. - (64.91) cr. (FY17), Rs. 429.53 cr. / Rs. 53.84 cr. (FY18) and Rs. 548.39 cr. / Rs. 19.31 cr. (FY19). So company has posted consistent growth over last couple of years in top-line consistently. IndiaMART has posted an average EPS of Rs. 4.70 and average RoNW of 9.20% for last three fiscals. Issue is priced at a P/BV of 17.40 as per NAV of 55.92 on 31.03.19. If we attribute latest earnings of FY19 on fully diluted equity post issue, then asking price is at a P/E of around 145. As per RHP, there is no listed peers available in Indian Market. But we may compare it with Info Edge (India) Limited and its valued with P/E of 80 and So issue looks over priced as per FY19 earnings. On BRLM's front, three merchant bankers are associated with this issue and have handled 31 public issues in the past three years. When we take recent 10 IPOs of each BRLM then out of those 4 issues opened below their offer price and 4 opened above issue price on listing day. As per financials, company's growth is consistent and very good, RoNW is 9.20% for last three fiscals and issue is priced at P/E of around 145 as per latest earnings. Company manages online B2B marketplace for products and services and this business segment is expected to grow at good rate in upcoming years. So we give NEUTRAL rating to this IPO.

• 1 Mr Dinesh Chandra Agarwal
• 2 Mr Brijesh Agrawal