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The grey market investors also seem to be bullish on the company as they have given a premium of 64% over the issue price of ₹108 per share, market analysts said.
Considering the market sentiment and strong subscription demand, Prashanth Tapse of Mehta Equities said that there is ample room for healthy listing gains of 40% or more against the issue price.
The analyst continues to recommend allotted investors to ‘Hold’ it for a long-term perspective.
“As the largest e-commerce-enabled SaaS provider and the only profitable company in this space with no listed peers, we believe the company may command a premium valuation multiple. With its unique technological capabilities and continuous innovation, we believe the company is well-positioned to capitalise on the expanding e-commerce enablement sector,” Tapse said.
Parth Shah of StoxBox anticipates that the company will make a strong debut on the stock exchanges Tuesday, potentially listing at a 59% premium over the upper end of the price band.
Though the issue looks rich in terms of valuation, Shah believes the company’s strong business performance along with industry tailwinds, provides an opportunity for further growth for the company. Thus, he recommends that investors who have been allocated shares can ‘Hold’ the shares from medium to long-term duration.
Shivani Nyati of Swastika Investmart said the company’s strong fundamentals, coupled with the overwhelming investor response, indicate a potential for a stellar listing.
The company’s strong market position, diversified client base, and proven track record of profitable growth position it well for future expansion. However, competitive pressures, negative cash flows, and operational dependencies on third-party service providers pose challenges, Nyati said.
Additionally, the analyst said that the IPO’s aggressive valuation at a P/E (price-earnings) of 84 times warrants cautious optimism.
The IPO, which was open from August 6 to 8, witnessed strong traction from investors and was subscribed 168.39 times on its final day of bidding, led by qualified institutional buyers (QIBs) and non-institutional (NII) bidders.
The company that manages e-commerce operations for brands, sellers and logistics service providers raised ₹276.57 crore via an initial share sale at the upper end of price band of ₹102-108 per share.
The issue included an Offer for Sale (OFS) aggregating up to 2.56 crore equity shares by promoter AceVector, and investor SB Investment Holdings (UK). Hence, the entire issue proceeds will go to these selling shareholders and the company will not receive any money from the IPO.
Founded in 2012, Unicommerce eSolutions is India’s leading e-commerce enablement software-as-a-service (SaaS) platform. The company’s suite of SaaS solutions enables end-to-end management of e-commerce operations for brands, retailers, marketplaces, and logistics service providers.
It serves a large and growing base of clients in India, including Lenskart, Fabindia, Zivame, TCNS, Mamaearth, Emami, Sugar, BoAt, Portronics, Pharmeasy, Cello, Urban Company, Mensa, Shiprocket and Xpressbees.
In February, Unicommerce had said it was expanding its overseas operations by onboarding more clients.
It is already serving 46 clients in Singapore, the Philippines, Indonesia, the UAE, and Saudi Arabia and is now expanding these operations by adding more clients.
According to a Redseer Report, the Total Addressable Market (TAM) for players in the eCommerce enablement SaaS in the transaction processing or nerve centre layer was estimated at about $1.2 billion in 2023.
This growth is driven by the increasing market potential for core products in this layer, an opportunity to broaden the product portfolio, and international expansion prospects in SEA and the Middle East.
Specifically, in India, the TAM for core products in the transaction processing layer was approximately $260 million in 2023.
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