Affle (India) Limited which had tapped the capital markets with its simultaneous fresh issue and offer for sale was subscribed over 86 times. Earlier the company had allotted 27,72,483 equity shares at the top end of the price band of Rs 740-745 to 15 anchor investors comprising of 28 entities.

The fresh issue was for Rs 90 crs and the offer for sale of 49,53,020 equity shares. The issue had opened on Monday the 29th of July and closed on Wednesday the 31st of July.

The issue saw the QIB portion subscribed 55.31 points, HNI portion a massive 198.69 times and Retail 10.96 times. There was a total of 2.97 lac forms which meant that the retail portion in terms of number of applications was subscribed 9.64 times. The overall issue was subscribed 86.49 times.

This was the first issue under the UPI regime where investors had to get the money blocked through the UPI app. With anything new being introduced, there are always issues and so also with this issue. A large number of applications have not been processed for various reasons and one wonders what steps the regulator would take.

In the anchor allocation, the largest allocation was made to Aberdeen and Franklin Templeton who were each allotted 3,05,640 shares or 11.02% of the anchor allocation. They were followed by seven investors who were allotted 2,28,200 shares or 8.23% and the last category of 6 investors were allotted 93,967 equity shares or 3.39% of the anchor book.

There is an existing investor in the company, Malabar India Fund who was allotted 2,28,200 shares.

The company is a global technology company and derives the largest part of its revenue from consumer platform. This platform provides new consumer conversions (acquisitions engagements and transactions) through relevant mobile advertising. It has in the last 12-18 months completed three acquisitions which would going forward result in margin expansion as the margins currently from these acquired businesses were lower compared to the parent’s core business. The issue is a Newgen business and is currently focused on the smart phone or hand held device.

The full details of the subscription are given below: –

Markets continued to be under selling pressure during the week gone by. There was a ray of hope however with markets turning flat on Expiry day on Thursday and gaining some ground on Friday. BSESENSEX lost 454.22 points or 1.18% to close at 37,882.79 points. NIFTY lost 134.95 points or 1.18% to close at 11,284.30 points. The broader indices saw BSE100, BSE200 and BSE500 lose 1.24%, 1.14% and 1.24% respectively. BSEMIDCAP lost 1.58% while BSESMALLCAP lost 1.88%.

Dow Jones closed the week with modest gains and was up 38.25 points or 0.14% at 27,192.45 points. The Fed meets later during the upcoming week and is widely expected to reduce interest rates. The Indian Rupee lost 10 paisa or 0.15% to close at Rs 68.90 to the Dollar.

July futures expired on a weak note and the series was down 693.75 points or 5.81% to close at 11,252.15 points. This was probably the worst expiry since the beginning of the current calendar year.

Results season continues to be tough. Tata Motors reported huge losses for the quarter with net revenue on a consolidated basis at Rs 61,467 crs while there was a loss before tax of Rs 3,129 crs. Revenues were down 7.7% compared to a year ago. The share price corrected on Friday and lost almost Rs 7 at Rs 144.35.

The fresh issue of Rs 90 crs and simultaneous offer for sale of 49,53,020 equity shares from Affle India Limited begins on Monday the 29th of July and closes on Wednesday the 31st of July. The price band is Rs 740-745. The price earnings multiple based on consolidated results for the year ended March 2019 is 36.82- 37.06 based on the EPS of Rs 6.87. The company had earlier on Friday allotted 27,72,483 shares to 15 anchor investors comprising of 28 entities. The company is a global technology company and derives the largest part of its revenue from consumer platform. This platform provides new consumer conversions (acquisitions engagements and transactions) through relevant mobile advertising. It has in the last 12-18 months completed three acquisitions which would going forward result in margin expansion as the margins currently from these acquired businesses were lower compared to the parent’s core business. The issue is a Newgen business and is currently focused on the smart phone or hand held device.

The bet on the company would be that it continues to grow its revenues at 30% plus and improves the operating performance of the acquired businesses. The opportunity to grow is huge with the market share of the company being small and the addressable market very large.

There would be more IPO’s coming in the next fortnight as companies look to raise capital to fund their businesses and also provide exits to private equity investors. The success or otherwise of these issues would depend on pricing.

The week ahead would see markets try to build on the base after the sharp correction since budget was presented a three weeks ago. The selling from FPI’s should also abate going forward which would provide relief to the markets.

It makes sense to look to build one’s portfolio going forward from hereon and use dips to add to the same. Allow markets to consolidate around current levels. It appears 11,000 to 11,100 on the NIFTY and 37,500-37,700 on the BSESENSEX are decent levels of support. A base is likely to be formed once again at these levels and then build.