#4 Reasons Why IndiaMART's IPO was Oversubscribed On the final day, the IPO was oversubscribed almost 36 times

By Vanita D'souza

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

IndiaMART

The general election is finally over and the companies are back in action to raise funds from the capital market. Earlier this week, during the final day of its issue, IndiaMART InterMesh saw an extremely warm response from investors.

According to NSE, on its third day, the IPO was oversubscribed almost 36 times and received bits of 9,66,86,235 equity shares on the final day. The total issue size was 26,92,824 equity shares. As the issue is an OFS, IndiaMART will not receive any proceeds from it.

With the IPO, the company planned to raise around INR 475 crore. The lower band on stocks exchange was at INR 970 per piece and upper band INR Rs 973 per piece.

According to reports, IndiaMART was the second most successful IPO in 2019 and here are the five reasons why IndiaMART IPO could break the ceilings.

The Industry

As per a KPMG report, the digital classifieds market has recorded growth at a CAGR of 29.5 per cent between FY2017 to FY2022, which is mainly driven by the B2B segment along with real estate and automobiles. On the other side, the B2B segment is estimated to touch INR 11.9 billion by FY2022.

"This market size only consists of revenues from online B2B classified websites, which are involved in the listing, discovery and matchmaking of businesses on their platform. However, given the large market of online search in India, the same also represents a large potentially addressable market for online B2B classified platforms," the report added.

The Company

Started by Dinesh Agarwal with a seed capital of merely INR 40,000 in the year 1999, IndiaMART today is the largest B2B marketplace operating mainly in the MSME space.

As of March 31 2019, IndiaMART recorded 82.70 million registered buyers who have access to 5.55 million suppliers in India. These suppliers list over 60 million products and services across 54 industries. Furthermore, the company has around 1,30,000 customers using its paid services and has clocked in a revenue of INR 507 crore in FY 2019.

ICICI Securities' Research Analyst Devang Bhatt and Deepti Tayal, in their report, say strong brand recognition and market position creates the following positive effects of a strong network and creating community effects through large numbers of product and service listings on its marketplace.

"IndiaMART's vast and vibrant network of buyers and suppliers allows it to act as an enabler of scale in the Indian B2B e-commerce sector," the duo added.

The Target Audience

Presently, there are over 51 million MSMEs in the country and of which, KPMG notes that 10 million are digital ready. As the number is bound to increase, IndiaMART is likely to expand its customer base and register more users.

"Benefits of online listing like enabling access to a customer base beyond local market/ reach and better information on competitors and their offerings may drive the online classifieds demands," the KPMG report noted.

The Digital First Outlook

IndiaMART's mobile website and app accounts for more than 70 per cent of its total traffic and the company witnessed more than 396 million in FY2018.

SMC in its reports points out that IndiaMART plans to continue its investment in its mobile platforms by further developing and integrating lead management system applications, user interface and notifications, customer services provided through instant messaging, GPS location capabilities, voice search technologies and other personalization features in its IndiaMART app.

IndiaMART also optimizes data analytics and artificial intelligence to understand the behaviour of suppliers and buyers on its marketplace for improved user experience.

Vanita D'souza

Former Senior Correspondent, Entrepreneur India

I am a Mumbai-based journalist and have worked with media companies like The Dollar Business Magazine, Business Standard, etc.While on the other side, I am an avid reader who is a travel freak and has accepted foodism as my religion.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Technology

IT Companies Bet on Small-Mid Size Deals to Drive Revenue

Large deals have fallen out of favour with end clients due to their tendency to create stickiness, inflexibility, and inefficiency.

News and Trends

Tech Startups ThinkMetal, MetaShot, and MedMitra AI Raise Early-Stage Capital

Indian startups listed below have revealed details of their latest funding rounds, fueling their growth.

Business News

'Everyone Can Profit From It': What Is DeepSeek? China's 'Cheap' to Make AI Chatbot Climbs to the Top of Apple, Google U.S. App Stores

DeepSeek researchers claim it was developed for less than $6 million, a contrast to the $100 million it takes U.S. tech startups to create AI.

News and Trends

How GST Budget Reforms Could Shape the Future of India's MSME

The GST reform holds immense potential to bolster India's MSME sector, but its current framework requires critical refinements to address its challenges. The upcoming budget is expected to make major reforms for MSMEs as the backbone of the country.

News and Trends

MapmyIndia Acquires 9.37% Stake in SimDaaS

MapmyIndia will invest INR 3 crore in a mix of equity shares and compulsorily convertible preference shares (CCPS) in SimDaaS. The acquisition is expected to bolster MapmyIndia's business portfolio.