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Infibeam plans Rs1,000 crore IPO in the next six months [Jerusalem Post (Israel)](Jerusalem Post (Israel) Via Acquire Media NewsEdge) Infibeam Incorporation Pvt. Ltd, an Ahmedabad-based e-commerce company founded by four men who worked together at Amazon.com Inc. in the US, plans to raise around Rs.1,000 crore in the next six months through an initial public offering (IPO). "We aim to become the first e-commerce company to get listed on the stock exchange," said Infibeam chief executive officer (CEO) Vishal Mehta, who has a degree in operations research and management from Cornell University and graduated from the MIT Sloan School of Management. "We expect the valuation of our company to be about $1 billion," Mehta said. "A valuation process is still underway but we are hopeful that we will be the first billion dollar IT (information technology) company from Gujarat." Infibeam has appointed Axis Bank Ltd to be the lead book runner for the IPO and is seeking to list on both the National Stock Exchange and the BSE. Many companies have lined up plans to raise money through IPOs and share sales to institutional investors to fund expansion in anticipation of an economic recovery after two years of sub-5% growth. The BSE's benchmark Sensex index has gained 29% this year as foreign institutional investors bought a net $13.3 billion from the local equity market, which ended on Thursday at a lifetime closing high of 27,346.33 points, If Infibeam's IPO materalizes, it would become the first publicly traded e-commerce company in India. "Infibeam is one of the oldest e-commerce firms and it has a decent technology platform. They have been overtaken by Flipkart, Snapdeal and others but I think an IPO is possible," said Ashish Jhalani, founder of eTailing India. Infibeam was founded by Mehta, chief information officer Vijay Subramanium, chief operating officer Sachin Oswal and chief technology officer Ajay Chandra after they quit Amazon, the online retailer that's credited with revolutionizing e-commerce, in 2007. Infibeam claims to offer 15 million products, which it says receives five million monthly visits. The site offers products including books, movies, music, mobile phones, computers, apparel, jewellery, footwear and auto accessories. Infibeam is the sole authorized online retailer in India for Apple Inc.'s products and recently sold thousands of the newly launched iPhone 6 and iPhone 6 Plus online. The company achieved break-even in 2012-13, posted marginal profits in 2013-14 and expects to post a profit of Rs.50 crore on sales of Rs.400-500 crore this financial year, making it the first Indian e-commerce company to be profitable, according to Mehta. Infibeam is debt-free, he said. India's stock market listing rules allow unprofitable companies to go public but with restrictions on the number of shares that can be sold to retail investors. Companies that want to go public but haven't reported three years of profits have to sell a majority of their shares to institutional investors. Earlier this year, Sony Music Entertainment bought a 26% strategic stake in Infibeam Digital Entertainment Pvt. Ltd, the digital entertainment arm of Infibeam. According to a May statement by Sony Music, Infibeam will continue to hold a majority stake in the company. Investor interest in Indian e-commerce websites has surged this year. On Tuesday, SoftBank Corp., the largest shareholder in Chinese e-commerce giant Alibaba Group Holdings Ltd, made its biggest bet yet on Indian Internet companies, investing $837 million in e-commerce marketplace Snapdeal.com and online taxi booking service Ola. More than $3 billion has already been invested in Indian e-commerce sites this year, after a two-year period when most venture capital firms had steered clear of online retailers, according to Mint research. Snapdeal and its rivals—Flipkart and Amazon India—are topping up their war chests, allowing them the flexibility to offer deeper discounts to buyers and pursue aggressive promotions for a bigger slice of the fast growing e-commerce market in Asia's third-biggest economy. Online retail is worth $3.1 billion, or 10% of the organized retail market, and is estimated to grow to $22 billion, or over 15% of the organized retail market, in five years, according to a November 2013 report by brokerage firm CLSA. All rights reserved (c) 2014 The Jerusalem Post Provided by SyndiGate Media Inc. (Syndigate.info). |