The initial public offer (IPO) of Matrimony.com, which owns Bharat Matrimony, was subscribed 67 per cent on the first day of the bidding today. The IPO, with an aim to raise over Rs 500 crore, received bids for 18,78,510 shares against the total issue size of 28,11,280 shares, data available with the NSE showed. The issue, priced in a band of Rs 983-Rs 985, will give a valuation of Rs 2,220-Rs 2,224 crore to Matrimony.com. The company has already raised Rs 226 crore by allotting nearly 23 lakh shares to 10 anchor investors at Rs 985 per shares. Investors can subscribe the issue in lot sizes of 15 shares. Matrimony.com is offering a discount of Rs 98 to employees and retail investors. The issue will close on September 13, 2017 (Wednesday). On the first day of the issue, Matrimony.com IPO was subscribed 67 per cent.
1) Matrimony.com’s IPO is a mix of fresh issue (Rs 130 crore) and offer for sale by promoters and some private equity investors. Post this issue promoter holding in the company will come down to 50.6 per cent from 56 per cent now. The company plans to spend the Rs 130 crore of fresh capital raised through this IPO for advertising and business promotion (20 crores), purchase of land for office premises in Chennai (43 crores) and repayment of overdraft facilities (43 crores).
2) Incorporated in 2001, Matrimony.com is the leading matchmaking service provider in India with a database of 3.08 million active profiles. As of June 30, 2017, the company had 140 retail centers throughout India. Its flagship brand BharatMatrimony, has 15 language based domains under its umbrella. According to the comScore report for June 2017, Matrimony.com is the leader in online matchmaking services in India in terms of the average number of website pages viewed by unique visitors, time spent and total pages viewed, said Angel Broking in a report.
3) Analysts say Matrimony.com has a huge untapped market opportunity in India. This leaves a scope for huge untapped market opportunity for the company, says Angel Broking.
4) Other than matchmaking, to increase revenue, the company has also started offering additional marriage services to online customers i.e. decoration, catering and honeymoon packages from various vendors to meet customers’ wedding needs. For FY2017, Martimony.com had reported a net profit of Rs 44 crore on revenues of Rs 293 crore. Although, its revenue has increased at a CAGR of 12.63 per cent in last three fiscals, on a net basis the company had reported loss for FY14, FY15 and FY16.
5) At the upper end of the price band, Matrimony.com shares are valued at 35.7 times its annualised June quarter earnings per shares, which compared to some peers in the internet space is on a lower side, say analysts. Angel Broking has a “Subscribe” rating on the issue for a “mid-to-long term” perspective. “Going forward, we expect the company to perform better on top-line and bottom-line front considering strong brand value, leadership position, robust technology and expansion into marriage services segment,” the brokerage said. Domestic brokerage IIFL has also given “subscribe” rating on the IPO. Technological changes, increased competition and technical breakdown are key risks in the business of Matrimony.com, say analysts.