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Info Edge India Limited – IPO Review

October 27, 2006

Naukri.Com holding and promoter company Info Edge India Limited’s IPO will open for subscription on Oct-30th and closes on Nov-2nd. Here is an analysis of the same. First, I am very disappointed by the way the company management has arranged the financial figures of EPS, RONW, etc without tabulating on page 10 of the application form.

IPO of 5,323,851 equity shares of Rs10 each through 100% book building process. The price band has been fixed at Rs290 to Rs320 per equity share. This translates the issue size to be in the range of Rs154.39 crores and Rs170.36 crores.

Retail Investors have 30% of the issue reserved for them. Non-Institutional investors have 10% of the issue reserved for them.

Background on Info Edge India Limited:
The company derives major part of its revenues from recruitment classifieds and related services. 92.73% for the past year. rest of the revenue is contributed by Jeevansathi (Matrimonial Site) and 99Acres (Real Estate Site). Naukri.Com is the leader in online recruitment in India. Jeevansathi made it to the top-3 in online matrimony in India. 99Acres is relatively young trying to establish itself.

Brief Financials about Info Edge India Limited:
Income in crores.
FY2004 – Income=9.076 EPS=1.12
FY2005 – Income=19.472 EPS=0.15
FY2006 – Income=84.057 ESP=6.08

Post-Issue Share Holding and Financials:
Number of Eq. Shares = 2,72,95,256 of Rs10 each
If Promoters don’t sell their shares upon listing then, they will hold 54.6%

The company reported a net profit of Rs5.219 crores for Q1-2006. If the figures are annualised, then the company is expected to report a Net Profit of Rs20.87 crores and an EPS of Rs7.64.
At EPS of 7.64, the issue price of Rs290 or Rs320 translates into a forward P/E Multiple of 37.95 or 41.88.

I have requested for some more details from the company and will write my recommendation whether to APPLY or AVOID the issue after I receive a reply from the company.

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