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Review By Dilip Davda on September 4, 2017
Matrimony.com Ltd (Matrimony) is currently operating in two segment of business comprising (i) matchmaking services and (ii) marriage services and related sale of products. In fiscal 2017 and the three months ended June 30, 2017, matchmaking services and marriage services accounted for all of it's revenue and there was no revenue from the related sale of products.
Matrimony is the leading provider of online matchmaking services in India in terms of the average number of website pages viewed by unique visitors in June 2017 (Matrimony.com data does not include data from all sites under Matrimony.com). The company delivers matchmaking services to its users in India and the Indian diaspora through websites, mobile sites and mobile apps complemented by its on-the-ground network in India. Company’s brand, BharatMatrimony.com, has been ranked as India’s most trusted online matrimony brand by The Brand Trust Report India Study 2014 (a study covering 20,000 brands across 16 cities) and it believes that its other matchmaking brands such as CommunityMatrimony.com and EliteMatrimony.com are well-established in India. It enjoys early mover advantage in these segments. As of June 30, 2017, the company had a large database of profiles comprising 3.08 million active profiles (being profiles that have been published or logged in at least once during the prior 180-day period), which creates a network effect that attracts more users to register or subscribe through our websites, mobile sites and mobile apps and also results in higher customer engagement, which in turn drives monetization of its user base and enables it to maintain a leading position in the online matchmaking market in India, as opined by the management. Matrimony differentiates itself from other players in India by following a micro-market strategy whereby it offers a range of targeted and customized products and services that are tailored to meet the requirements of customers based on their linguistic, religious, caste and community preferences as well as personalized matchmaking services through EliteMatrimony and Assisted Service package.
To part finance its advertising and business promotion activities, purchase of land for construction of office premises in Chennai, repayment of overdraft facility and general corpus fund needs, the company is coming out with a maiden IPO to mobilize Rs. 500.32 to Rs. 501.07 crore (based on lower and upper price bands) by way of primary issue worth Rs. 130 crore (approx.1319796 equity share of Rs. 5 each) and offer for sale of 3767254 shares of Rs. 5 each in a price band of Rs. 983-985. Company is offering Rs. 98 per share (approx. 10%) discount to retail investors. Issue opens for subscription on 11.09.17 and will close on 13.09.17. Minimum application is to be made for 15 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. BRLMs to this issue are Axis Capital Ltd and ICICI Securities Ltd. Karvy Computershare Pvt. Ltd. is the registrar to the issue. Net of discount to retail category, net issue size is approx. Rs. 497 crore. Having issued equity at par (on the basis of Rs. 5 per share) it issued further equity in the price range of Rs. 55.23 to Rs. 2628.95 between July 2006 and April 2017. It has also issued bonus shares in the ratio of 15.4 share for every 1 share held in January 2012, 10.8 shares for every 60 shares held in December 2014, 1 share for every 2 shares held in January 2015. Post issue its current paid up equity capital of Rs. 10.63 crore will stand enhanced to Rs. 11.29 crore.
On performance front, Matrimony has (on consolidated basis) posted total revenue/net profits of Rs. 207.31 cr. / Rs. – (9.14) cr. (FY14), Rs. 242.84 cr. / Rs. – (2.90) cr. (FY15), Rs. 255.43 cr. / Rs. – (75.06) cr. (FY16), Rs. 292.93 cr. / Rs. 43.78 cr. (FY17). For Q1 ended on 30.06.17 of current fiscal, it has earned net profit of Rs. 14.62 crore on total revenue of Rs. 83.89 crore. As on 30.06.17 it’s paid up equity capital of Rs. 10.63 crore had a negative reserves of Rs. - (26.80) crore. If we annualize the latest earnings and attribute it on its equity then asking price is at a P/E of 38 plus. As it has a negative book value as on 30.06.17, P/BV cannot be ascertained. Last three fiscals Matrimony has posted an average negative EPS of Rs. – (7.07) and average RoNW is – (15.02%). Company has hived off its non-core and non-profit making business. Company has been posting improved performance on Q-o-Q basis for past few quarters. It has no listed peers to compare with. However, few internets based service providing companies are trading at a P/E of around 30 and below.
On BRLM’s front, two merchant bankers associated with this issue have handled 37 public offers in the past three years, out of which 10 offers closed below the offer price on listing date.
Conclusion: Negative book value as on 30.06.17 makes this issue an aggressively priced offer. However, considering recent workings, risks savvy cash surplus investors may consider moderate investment for medium to long term.
Review By Dilip Davda on September 4, 2017
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Matrimony.com Limited offers an early investment opportunity in Matrimony.com Limited. A stock market investor can buy Matrimony IPO shares by applying in IPO before Matrimony.com Limited shares get listed at the stock exchanges. An investor could invest in Matrimony IPO for short term listing gain or a long term.
Read the Matrimony IPO recommendations by the leading analyst and leading stock brokers.
Matrimony IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Matrimony IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Matrimony IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Matrimony IPO.
The Matrimony IPO allotment status will be available on or around September 19, 2017. The allotted shares will be credited in demat account by September 20, 2017. Visit Matrimony IPO allotment status to check.
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