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Next Orbit Ventures invests Rs 115 cr in Infibeam for 5% stake

Infibeam

Next Orbit Ventures has invested Rs 115 crore in Infibeam as part of its IPO, picking up around 5% in the ecommerce company. Infibeam will use the funds to expand its business, setup a cloud data center, 57 additional logistics centres, purchase of software and for purchase of property.

Note that last month, Infibeam, the first e-commerce company in India to list on the stock exchanges, saw 63% of the shares subscribed on the second day of the offer. On day one of the IPO, Infibeam’s shares were subscribed 0.21 times. The company had hit the markets with its Rs 450 crore initial public offering on the 21st of March. However, Infibeam fixed a price band of Rs.360-432 per share for it public offer, which various investors found to be too high.

Investment bankers walk out: SBI Caps and Elara Capital are the lead bankers for the issue. In March, 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. Speaking 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.

Financials: Infibeam’s red herring prospectus said that the company had reported a profit of Rs 6 crore in the first half of . For FY14, the losses were at Rs 25.95 crore. It stood at Rs 24.91 crore in FY13  and Rs 10.83 crore in FY12. For the nine month period between April 2014 and December 2014, Infibeam’s total revenues were Rs 19.295 crore. For the year ended March 2014, total revenues were at Rs 10.81 crore.

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.

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