India is finally set to have its first e-commerce IPO. Gujarat based Infibeam has taken the lead, the company behind various online properties such as Infibeam.com, BuildaBazaar, Incept and Picsquare, is choosing one of the most popular ways of raising funds and will bring out its IPO, on the 21st of March.
The company has also declined the SEBI recommended platform for startups with its easier norms and will instead go after listings on the BSE and NSE, the main stock exchanges. Barring changes, the company has fixed its price band at Rs 360-432 per equity share for the IPO.
Infibeam is planning to raise around INR 450 crores through its maiden venture in the field, and hopes to reach the figures within two days of its launch. The company says that the funds will be used for various purposes, including setting up a cloud data centre and shifting and setting up a registered and corporate office of the company. Infibeam is also hoping to deploy the money gained by selling equity, to set up 75 logistics centres across the country.
While the initial venture will cost it in excess of 235 crores, setting up the logistics centres will require around 37.5 crores, leaving it with plenty of surplus for other purposes. The company currently has 13 logistics centres across 12 cities in India, so the move will give it a significant push, almost hexa-tupling — is there such a word? — its capabilities.
The company had managed to consistently decrease its losses in the recent fiscal quarters and managed to show profits of around 6 crores in the past six months , although the mounting expansion drive may keep it from showing increasing profits the very next day after the IPO.
To Infibeam’s credit, the company has managed to keep itself afloat, without any significant external investments and indeed, this will be the first time that it raises capital of this magnitude.
Meanwhile, it will be interesting to see how the general investors, that is the public — responds to the idea of putting in money into e-commerce — a niche which recently lost a portion of investor and VC interest after showing paltry returns — if any — despite huge investments.
Infibeam’s maiden IPO is expected to be followed by those of HealthCare Global Enterprises (HCG) and Bharat Wire Ropes, within the week.