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market | IST

Route Mobile's shares plunge over 9% on profit-booking after bumper listing of 102% premium over issue price

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The cloud communications service provider Route Mobile debuted on the stock exchanges with a strong listing of 102 percent at Rs 708 on the BSE, over its issue price of Rs 350.

The cloud communications service provider Route Mobile debuted on the stock exchanges with a strong listing of 102 percent at Rs 708 on the BSE, over its issue price of Rs 350. On the NSE, it opened at Rs 717, a massive 104.9 percent premium over IPO price.
However, the shares plunged 8 percent to Rs 651.10 on BSE, while on NSE, it was down over 9 percent to Rs 650.30/ share.
Last week, Happiest Minds Technologies promoted by Ashok Soota, was listed 111 percent higher over its issue price, leaving the likes of  IRCTC and DMart behind.
The IPO was fully subscribed on the first day of its bidding, and received 74.13 times subscription on its last day of the IPO subscription.
The company said that all the funds raised from the fresh issue will be utilised to repay debt, make a strategic acquisition, purchase office premises in Mumbai and balance for general corporate purposes.
Of the Rs 600 crore, fresh issue of shares worth Rs 240 crore will be issued and the remaining Rs 360 crore will be raised through offer for sale (OFS) route by promoters Y Sandipkumar Gupta and Rajdipkumar Gupta. This would result in the promoters' stake reducing from 96 percent pre-IPO to 66.3 percent post-IPO in the firm.
Most analysts were bullish on the issue for the long term, as well as listing gains, given the diversification in service offerings, robust growth opportunity in cloud communication, no major competition and good financial performance. They also expected a strong digital growth post-COVID-19 world.
About the company:
Route Mobile enjoys leadership position in the Cloud communication service. It provides services to enterprises, over-the-top (OTT) players and mobile network operators (MNOs). Its enterprise segment provides a cloud-based communication platform to enterprises, while mobile operations segment include services such as SMS analytics, firewall, filtering, monetisation and CPaaS (cloud-communication platform as a service) and hubbing solutions.
Globally Route Mobile has 9 direct and 12 step-down subsidiaries serving its clients through 18 locations across Africa, Asia Pacific, Europe, Middle East and North America. Company generates over 80 percent of its revenue in foreign currency.
As of June 2020, Route Mobile had served more than 30,150 clients since its inception. The company has direct relationships with over 240 mobile network operators (MNOs).