Gujarat-based ecommerce player Infibeam hit the markets with its Rs 450 crore initial public offering today. However, Infibeam has fixed a price band of Rs.360-432 per share for it public offer, and investors are finding it expensive.

A report by India Infoline said that this values the company at around Rs 2,300 crore at the upper price band. “We envisage better profitability on the back of the upcoming cloud data centre and improvement in technology infrastructure and overseas growth. However, Infibeam issue seems highly expensive at current valuations. Investors should give the IPO a miss,” the report added.

The Economic Times report too expressed concerns over the valuation and said: “At an annualised FY16 sales of Rs 350 crore and net profit of Rs 13 crore, demanding a market capitalisation of about Rs 2,300 crore appears to be too ambitious.”

At the end of market’s close, Infibeam’s shares were subscribed 0.16 times with muted interest from retail individual investors and non-institutional investors.

Investment bankers backing off

Last week, Kotak Mahindra Capital and ICICI Securities walked out of the IPO and cited that the pricing was too high, a Mint report said citing sources. Speakting to the publication, Vishal Mehta, managing director at Infibeam, said they decided to go ahead with the issue with SBI Caps and Elara Capital. In its Draft Red Herring Prospectus, Infibeam had listed Kotak Mahindra Capital and ICICI Securities as investment bankers to the issue.

Paid tweets

Factor Daily also reported that Infibeam had been paying influencers on Twitter to tweet in favour of the IPO. The report said that the company had engaged with a digital marketing agency which had promised influencers Rs 150 for 22 tweets in favour of the company. The agency also said that it would offer more money if required.

Interestingly, MediaNama’s earlier report on Infibeam’s issue received a number of comments in favour of the issue. We have not been able to verify whether these comments were paid for.