Unicommerce eSolutions IPO: Subscribe or Skip?

ostpmedia

5 months ago

The IPO (Initial Public Offering) for Unicommerce eSolutions begins today, August 6, and will be open for bids until August 8. The company is offering shares at a price between Rs 102 and Rs 108 each. Investors can apply for a minimum of 138 shares, and in multiples of that number.

About Unicommerce eSolutions

Founded in February 2012, Unicommerce eSolutions operates as a SaaS (Software as a Service) provider specializing in e-commerce solutions. The company’s software helps businesses manage various aspects of e-commerce operations, such as inventory, order processing, and logistics.

IPO Details and Financials

Unicommerce is raising Rs 276.57 crore through this IPO, which is an offer-for-sale (OFS) of 2,56,08,512 shares. This means the company itself will not receive any of the proceeds; instead, the shares are being sold by the promoter entity AceVector (previously Snapdeal) and investor SB Investment Holdings.

Before the IPO, Unicommerce raised Rs 124.5 crore from 11 anchor investors. These investors include major names like Morgan Stanley, SBI Mutual Fund, and HDFC Mutual Fund, who bought shares at Rs 108 each.

Product Offerings

Unicommerce offers a variety of software products, including:

Warehouse and Inventory Management: Helps track and manage stock levels.
Multi-channel Order Management: Manages orders from various sales channels.
Omnichannel Retail Management: Integrates different sales and service channels.
Seller Management Panel: Assists with managing seller accounts on marketplaces.
Post-order Services: Manages logistics tracking and courier services.
Payment Reconciliation: Helps in reconciling payments.

The company’s technology integrates with 131 marketplaces and web stores, processing a significant number of orders.

Financial Performance

For the fiscal year ending March 31, 2024, Unicommerce reported a profit of Rs 13.08 crore, up from Rs 6.48 crore the previous year. Its revenue also grew from Rs 92.97 crore to Rs 109.43 crore.

The IPO allocation includes 75% for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 10% for retail investors.

Key Players in the IPO

The IPO is managed by IIFL Securities and CLSA India, with Link Intime India as the registrar. The shares are expected to be listed on both the BSE and NSE, with a tentative listing date of August 13.

Opinions on the IPO

Here’s what various brokerage firms are saying about the Unicommerce IPO:

Swastika Investmart: They advise subscribing with caution. They acknowledge Unicommerce’s strong market position and growth potential but caution that the IPO is priced high at a P/E ratio of 84 times earnings. They point out potential challenges like competitive pressure and reliance on third-party services.
Arihant Capital Market: They recommend subscribing. They highlight Unicommerce’s decade-long experience, strong market presence, and scalable business model. However, they note potential risks such as technological advancements and market challenges.
StoxBox: They also recommend subscribing. Despite the high valuation, they believe that the company’s strong performance and favorable industry trends offer good medium to long-term investment potential.
Marwadi Financial Services: They suggest subscribing due to the company’s dominant position in the e-commerce SaaS market and its reasonable valuation compared to future growth potential.
Ventura Securities: They recommend subscribing as well. They emphasize Unicommerce’s position as a leading e-commerce enablement platform and its profitability compared to competitors.

Conclusion

The Unicommerce eSolutions IPO is a significant event for investors interested in the SaaS and e-commerce sectors. While there are strong endorsements from several brokerage firms, the high valuation and competitive landscape suggest that investors should weigh the potential risks and rewards carefully before subscribing.

Disclaimer: The opinions and recommendations provided above reflect the views of individual analysts or brokerage firms and do not represent those of OSTP Media. We recommend that investors consult with certified experts before making any investment decisions.

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