Route Mobile Ltd - IPO Review - ICICI Securities

Route Mobile Ltd (RML) provides cloud-communication platform as a service (CPaaS) to enterprises, over-the-top (OTT) players and mobile network operators (MNOs). The company's enterprise solution comprises two primary components - front-end that provides an interface for enterprises to integrate with and a back-end that is directly integrated with over 240 MNOs and provides access to over 800 MNOs globally, enabling it to leverage their SMS and voice channels for digital communication (Super Network). The company's total income & EBITDA has grown at a CAGR of 37.6% and 14.9%, respectively, between FY18 and FY20.

Investment Rationale

Omni-channel cloud communication platform service provider with diversified service offerings for enterprises

RML is among the leading CPaaS providers to enterprises, OTT players and MNOs. According to the ROCCO Report 2020, the company was ranked as a tier I A2P service provider internationally. Being an associate member of the GSMA and an accredited open hub connectivity solution provider allows the company to manage both A2P and P2P traffic for enterprises and MNOs. The company has developed a single unified API, an 'omni-channel platform', which incorporates communication modes such as A2P/P2A/ two-way messaging, e-mail, RCS messaging, voice and OTT business.

Scalable delivery platform supported by robust infrastructure

RML's cloud-based delivery platform enables it to build and manage applications without having to create and maintain the underlying infrastructure for each client. The company is, therefore, able to provide enterprises with solutions to operate applications without purchasing, configuring or managing the underlying hardware and software. The company currently operates at a throughput capacity of over 10,000 messages per second.

Priced at P/E of 28.8x FY20 on upper end of band

At the higher end of the price band of Rs. 350, the stock is available at a P/E of ~28.8x on FY20 diluted EPS.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_RouteMobile_IPOReview.pdf

Source : Equity Bulls

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