The issue would be a mix of fresh issue (up to Rs 90 crore) and an offer for sale by existing shareholders (up to Rs 369 crore). The price band for the offer has been fixed in the range of Rs 740-745 a share.
At the higher end of the price band, the issue is available at a P/E multiple of 38.9 times FY19 consolidated EPS on pro-forma basis. The company has no listed peers. Analysts said investors may look to subscribe the issue from a long-term basis.
The technology company has two business segments, consumer platform and enterprise platform. The consumer platform aims to enhance returns on marketing spend through delivering contextual mobile ads and reducing digital ad fraud. On the other hand, the enterprise platform primarily provides end-to-end solutions for enterprises to enhance their engagement with mobile users.
The global ad tech market expected to grow at a compounded annual growth rate of 10 per cent to $54 billion during 2017-22. India ad tech market is seen growing at 39 per cent to $808 million over 2017-22.
“Affle has been building and improving its consumer platform resulting in products spanning the entire value chain. In addition, following the acquisition of Vizury, Shoffr and RevX, the service offerings have increased. Expansion of customer base and market penetration could aid volumes of cost per converted user (CPCU). Being the first of its kind issue and growth prospects, despite mature valuations, investors can subscribe to the issue from a long term perspective,” said Centrum Broking.
Umesh Mehta, Head of Research at Samco Securities said the company looks promising, considering strong growth in the last three years. Even though the ad tech industry is competitive, Affle outperforms peers with a higher number of consumer profiles and data points leading to a network moat, he said.
The high valuations justify the listing premiums it deserves,” Mehta said.
Data showed Affle’s consumer platform had 2.02 billion consumer profiles as of March 31. The company has accumulated over 300 billion data points over the preceding 12 months, which helps it enhancing prediction and recommendation algorithm for the platform.
Meanwhile Affle’s will be the first IPO under the new UPI mechanism that is mandatory for retail investor category since July 1.
