About the Company:
Affle is a global technology company with a proprietary consumer intelligence platform that delivers consumer engagements, acquisitions and transactions through relevant Mobile Advertising.
The platform aims to enhance returns on marketing investment through contextual mobile ads and also by reducing digital ad fraud.
Affle’s Consumer platform is used primarily by online & app companies for mobile advertising & monetization, its Enterprise platform helps offline companies to go online through platform-based app development, enablement of O2O commerce and customer data platform.
Company’s Consumer Platform is used by business to consumer (“B2C”) companies across industries, including e-commerce, fin-tech, telecom, media, retail and FMCG companies, both directly and indirectly through their advertising agencies.
For Fiscal 2019 on a consolidated basis, Company’s revenue from Consumer Platform contributed 97.0% of the revenue from contracts with customers.
Company’s customers include the companies for which Affle (India) undertakes a mobile ad campaign as well as the advertising agencies acting for such companies.
Company’s Business Segments:
Consumer Platform primarily provides the following services:
- new consumer conversions (acquisitions, engagements and transactions) through relevant mobile advertising
- retargeting existing consumers to complete transactions for e-commerce companies through relevant mobile advertising.
- an online to offline (“O2O”) platform that converts online consumer engagement into in-store walk-ins.
Consumer Platform comprises the following:
“Affle” branded consumer intelligence platform that deliver consumer acquisitions, engagements and transactions through relevant mobile advertising (the “Affle Consumer Platform”).
“RevX” branded mobile only self-serve programmatic platform that delivers consumer acquisitions, engagements and transactions through relevant mobile advertising (the “RevX Platform”)
“Vizury” branded retargeting media business for e-commerce companies and our push notifications offerings for e-commerce companies on a software as a service model (the “Vizury Commerce Business”).
“Shoffr” branded online to offline platform that converts online consumer engagement into in-store walk-ins and transactions (the “Shoffr Platform”).
Company’s Enterprise Platform.
Company also provides end-to-end solutions for enterprises to enhance their engagement with mobile users, such as developing Apps, enabling offline to online commerce for offline businesses with e-commerce aspirations and providing enterprise grade data analytics for online and offline companies (collectively, the “Enterprise Platform”).
For Fiscal 2019 on a consolidated basis, Company’s revenue from Enterprise Platform represented 3.0% of the revenue from contracts with customers.
Company’s Revenue Sources:
Company primarily earns revenue from Consumer Platform on a cost per converted user (“CPCU”) basis, which comprises user conversions based on consumer acquisition and transaction models.
Company also earn revenue from Consumer Platform through awareness and engagement type advertising, which comprises cost per thousand impressions (“CPM”), cost per view (“CPV”) and cost per click (“CPC”) models.
Company’s Consumer Acquisition model focuses on acquiring new consumers for businesses, which is usually in the form of a targeted user downloading and opening an App or engaging with an App after seeing an advertisement delivered by Affle (India).
Company’s Transaction model is usually in the form of a targeted user submitting a lead acquisition form or purchasing a product or service after seeing an advertisement delivered by Affle (India).
- Mr. Anuj Khanna Sohum (Designation: Chairman, Managing Director and Chief Executive Officer)
- Mr. Anuj Kumar (Designation: Director and Chief Revenue & Operating Officer)
- Mr. Kapil Mohan Bhutani (Director and Chief Financial & Operations Officer)
Positives for the Company:
Company’s Consumer Platform has a Leading Position in India.
As at March 31, 2019, Affle Consumer Platform had approximately 571 million consumer profiles in India. Company provides services across the value
chain in digital advertising, spanning the areas of DMP, DSP/SSP, fraud detection and ad network.
They are one of the very few companies that have products spanning the entire value chain.
Proven International Track Record.
For Fiscal 2019 on a consolidated basis, Company’s revenue from contracts with customers outside India was Rs.140.5 crores, which 56.4% of the total revenue from contracts with customers.
Company’s key international markets are Other Emerging Markets (which comprises Southeast Asia, the Middle East, Africa and others) and Developed Markets (which comprises North America, Europe, Japan, Korea and Australia).
Company has three international offices: Singapore; Jakarta (Indonesia); and Dubai (UAE).
Company has Huge Number of Consumer Profiles.
As at March 31, 2019, Affle Consumer Platform had approximately 2.02 billion consumer profiles, of which approximately (a) 571 million consumer profiles were in India, (b) 582 million consumer profiles were in Other Emerging Markets; and (c) 867 million consumer profiles were in Developed Markets.
Global Customer Base.
Global advertising spend is managed largely through six major advertising agency groups: WPP (GroupM); Publicis; Omnicom (OMG); Dentsu Aegis Network (DAN); Interpublic Group (IPG) Mediabrands and Havas.
Affle currently works with all of the top six global advertising agency groups and with other mobile focussed advertising agencies, such as M&C Saatchi Mobile, and with domestic advertising agencies, such as Interactive Avenues and Madison.
Company has run mobile advertising campaigns for some of the largest e-commerce and mobile App companies / brands in the world, such as Amazon, Flipkart, Goibibo, Zee, Dunzo, Dailyhunt, Meesho, Games 24×7, Shipt, Jabong,BookMyShow, Wynk, ALTBalaji, PhonePe, Gojek, Spotify, Sivvi, and well-known companies in other industries such as Airtel, Reckitt Benkiser, Johnson & Johnson, McDonalds, Nissan, Air Asia, Axis Bank and Citibank.
Increasing International Presence.
Company currently has business development teams outside India in Singapore, Jakarta (Indonesia) and Dubai (UAE) (opened an office in Dubai in March 2019).
Company has plans for increasing the business development efforts outside India is to build a business development team in North America during Fiscal 2020 to service the North American market.
Negatives for the Company:
Intense Competition from Global Giants.
The market for mobile advertising solutions is highly competitive and rapidly changing with multiple regional and global players. Although it is dominated by digital giants such as Google and Facebook, there are over a hundred companies around the world who offer one or more components of this solution.
At this point of time the biggest question in every Investors mind is whether this is a correct time to Invest in IPOs? If we look at the Current Stock Market Conditions where the Smallcap and Midcap Stocks have been beaten down beyond anybodys imagination and moreover in last few weeks even large cap stocks have also started cracking.
The current market situation where many good Companies with great fundamentals, Debt free Companies & Good management are trading in single digit Price Earnings. So we should accept the fact that these are tiring times for Investors.
So coming down to Affle (India) IPO we will first discuss the business of the company in simple terms, Affle Ltd undertakes a mobile ad campaigns for some of the largest e-commerce and mobile App companies / brands in the world.
As company’s revenues are dependent on mobile ad campaigns and we all know that the internet usage is increasing with each passing day, which means that company has a good scope for growth in the coming years.
But at the same time we should not forget that big global giants like facebook & google are also dependent on mobile Ad revenues and they pose a big competition for smaller companies operating in the same line of business.
Now coming to the main question as per our opinion Affle IPO valuations is Expensive, but since this is the first company to get listed in this space, we can’t predict how the market will respond.
Objectives of the Issue:
- Funding the working Capital Requirements of the Company.
- General Corporate Purposes.
Financials of the Company: (FY 19 result is Consolidated)
|(in Crores)||FY 15||FY 16||FY 17||FY 18||FY 19|
|Issue Opens on||29th July 2019|
|Issue Closes on:.||31st July 2019|
|Issue Price||Rs.740 – 745|
|Minimum Lot||20 Shares|
|Issue Size||Rs.459 cr ($66 million)|
|Market Cap||Rs. 1899 cr ($275 million)|
|Listing at||NSE & BSE|
|Equity Shares Offered (Fresh)||12,08,054|
|Equity Shares Offered (OFS)||49,53,020|
|Equity Shares Offered (Fresh + OFS)||61,61,074|
|Equity Shares Prior to the Issue||2,42,88,314|
|Equity Shares after the issue||2,54,96,368|
|Finalization of Basis of Allotment||On or Before 5th August 2019|
|Initiation of Refunds||On or Before 6th August 2019|
|Credit of Equity Shares:||On or Before 7th August 2019|
|Listing Date:||On or Before 8th August 2019|
Subscription Details: (Will be Updated)
|(Subscription-Category-Wise (no. of times) Till time : 05:00 PM)||Shares Offered||Day-1||Day-2||Day-3|
IPO Valuation Parameters:
|Earnings Per Share (EPS)||Price To Earnings ratio (PE)||Return on Net Worth (RoNW)||Net Asset Value (NAV)|
|Company Contact Info:|
|AFFLE (INDIA) Ltd
312, B-Wing, Kanakia Wallstreet,
Andheri Kurla Road
Andheri (East), Mumbai 400 093
Tel.: + 91 22 6239 8047
|IPO Registrar Info:|
|Karvy Fintech Private Limited
Karvy Selenium Tower B Plot 31-32, Gachibowli
Financial District, Nanakramguda
Hyderabad 500 032, India
Tel: +91 40 6716 2222
Investor E-mail: firstname.lastname@example.org