First dotcom float flies very high

Info Edge public issue logs 55 times subscription

MUMBAI: When Info Edge came to the market, there were some sceptics questioning the ability of the Indian investor to understand the dotcom business.

On Friday, they gave a resounding reply. The public issue, which closed for subscription on Thursday, was subscribed nearly 55 times.

And when the share gets listed around November 15, Info Edge’s promoter, the 42-year-old Sanjeev Bikhchandani, would have the distinction of being the country’s first dotcom rupee billionaire created by by the Indian capital markets. By conservative estimates, he would be worth about Rs 400 crore for his 44% stake (1.21 crore shares) post issue.

But if oversubscription is any yardstick to go by, that figure could multiply fast. Analysts said the success of Info Edge could encourage more Indian dotcoms to approach the primary markets to raise funds and go public, using the Indian stock bourses as the mode to monetise equity capital, analysts said.

Says Sandeep Agarwal, assistant vice-president of ICICI Securities, one of the two investment banks (the other being Citibank) guiding the issue: “Indian capital markets are much more mature now to understand new generation businesses.”

Sify and Rediff are two Indian dotcoms that are listed in stock bourses. But both are listed on US bourses. “This transaction shows the comfort of international investor in Indian capital markets,” Agarwal said. “Info Edge has also drawn global attention to the Indian internet space,” he adds.

The public issue of 53.23 lakh equity shares of Rs 10 each by Info Edge was placed at the market at a price band of Rs  290 to Rs 320 per equity share.

Bikhchandani himself says he never expected such an overwhelming response to the public issue. A BA in economics from St Stephen College, New Delhi and an alumni of the Indian Institute of Management, Ahmedabad, Sanjeev is a true blue marketer, whose first job was with Lintas.

He spends at least 25% of Info Edge revenues on advertisements and promotions. The fantastic monetisation of his shareholding, he says, is secondary.

“We haven’t built this company as an investment. We are building an institution here,” Sanjeev told DNA Money on Friday. He says he will stick to the knitting. “We enable handshakes and our businesses will always be information-based.”

Info Edge is a provider of online recruitment and matrimonial classifieds and related services in India through its websites naukri.com and jeevansathi.com. Almost 90% of its revenues come from facilitating placements.

“I don’t see any of the promoters selling in a hurry,” Sanjeev assures the money raised in the IPO will be used to grow the business.

“We’ll make a couple of new launches and even use it for acquisitions,” he reveals. The game plan will unfold in the next 6-9 months.