Unicommerce eSolutions IPO subscribed 8.7x on Day 2 so far; GMP soars

The initial public offering (IPO) of Unicommerce eSolutions continued to attract a solid response from the investors during the second day of the bidding process, bucking the jittered market sentiments. The issue, which had kicked off for bidding on Tuesday, August 06, ended day one with nearly 2.5 times bidding.
 

The New Delhi-based Unicommerce eSolutions is selling its shares in the price band of Rs 102-108 apiece. Investors can apply for a minimum of 138 shares and its multiples thereafter. It is looking to raise Rs 276.57 crore via IPO, which is entirely an offer-for-sale of up to 2.56 crore equity shares.
 

According to the data, the investors made bids for 12,21,17,442 equity shares, or 8.67 times, compared to the 1,40,84,681 equity shares offered for the subscription by 3.00 pm on Wednesday, August 07. The three-day bidding for the issue will conclude on Thursday, August 08.
 

The allocation reserved for retail investors was subscribed 28.01 times, while the portion reserved for non-institutional investors (NIIs) saw a subscription of 11.64 times. The quota set aside for qualified institutional bidders (QIBs) quota was 75 per cent as of the time.
 

Incorporated in February 2012, Unicommerce eSolutions is a SaaS platform that manages e-commerce operations for brands, sellers, and logistics providers. The company offers a range of software products to help businesses efficiently manage their e-commerce operations after purchase.
 

The grey market premium of Unicommerce eSolutions has seen a sharp upmove despite the volatility in the broader markets on the back of strong bidding. Last heard, the company was commanding a premium of Rs 50 in the unofficial market, suggesting a listing pop of about 46 per cent for the investors. However, the premium in the grey market stood at 35 a day ago.
 

Brokerage firms are mostly positive on the issue suggesting investors to subscribe to it for a long term. They see it as a key beneficiary of the rising e-commerce trend in India, strong product profile, sound financials, positive cash flows, scope of expansion. However, stretched valuations and low-entry barriers are the major risks for the company.
 

Unicommerce eSolutions is valued at P/Ex of 84.6 times on FY24 earnings, said Indsec Research. "We believe the issue is priced fairly given the strong prospects of the eCommerce SaaS market. We have a 'subscribe' rating on the company," it said.
 

Indsec Research is positive on the company's integrated eCommerce enablement SaaS platform which is placed in the core area of transaction processing; no listed player in this space which is profitable; net revenue retention; sticky nature of the integration ensures the longevity of the client relationship, leading to high recurring revenue.
 

Unicommerce eSolutions has raised Rs 124.5 crore through its 11 anchor investors, where it allocated 1,15,23,831 shares at Rs 108 apiece. It reported a net profit of Rs 13.08 crore for the year ended on March 31, 2024, while its profit stood at Rs 6.48 crore in the year ago period. The company's revenue stood at Rs 109.43 crore for FY24 and Rs 92.97 crore in the fiscal year 2022-23.
 

Mehta Equities believe that Unicommerce eSolutions brings investors a unique opportunity to invest in India's largest e-commerce enablement SaaS platform in the transaction processing layer. The company's comprehensive and modular suite of products, coupled with a vast range of plug-and-play integrations, makes it an essential component of its clients' tech stack.
 

"With its unique technology capabilities and continuous innovation, we believe the company is well positioned to capitalize on the expanding e-commerce enablement sector. Hence, we recommend investors to 'subscribe' to the Unicommerce eSolutions IPO with a long term perspective only," Mehta Equities said.
 

Unicommerce eSolutions has reserved 75 per cent of the net offer for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will get 15 per cent of the net offer. Remaining 10 per cent of the net offer shall be allocated for retail investors.

IIFL Securities and CLSA India are the book running lead managers of the Unicommerce eSolutions IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed at both BSE and NSE, with Tuesday, August 13 as the tentative date of listing.

 

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.