Affle India IPO: Here’s All You Need To Know

Affle (India) Ltd. will launch its initial public offering on Monday as its promoters look to enhance brand visibility and raise working capital.

Valuations

The company’s pre-listing earnings per share as on March 31, 2019, stood at Rs 20 per share. At Rs 745 per share, the upper end of the Affle India IPO price band, the firm is valued at trailing price to earnings ratio of 37 times. ICICI Direct projects Affle India’s post-issue price at Rs 19 per share, assigning it a 39 times PE ratio for the same period.

Key Risks

• The company gets 65 percent of its revenue from its 10 clients, its top client alone contributing 22 percent. Inability to keep these clients or failure to attract broader range of customers could have a material adverse impact on its business, according to Ambit Capital.
• The legal, regulatory and judicial environment around data protection and other matters is constantly evolving and can be subject to a significant change.
• ICICI Direct said that trade associations and self-regulatory groups have also promulgated best practices and other industry standards relating to targeted advertising. Such losses could adversely impact the company’s financial performance in the future.
• Inability to compete in a highly competitive and crowded industry.
• Adverse ruling on outstanding litigations.