MUMBAI E-commerce firm Infibeam Incorporation is eyeing a valuation of as much as $334 million as it sells shares next week in the sector's first initial public offering.
The company, founded by former Amazon.com (AMZN.O) employee Vishal Mehta in 2007, set a price range of 360 rupees to 432 rupees per share on Tuesday as it seeks to raise up to 4.5 billion rupees ($67 million) in the IPO.
Speaking at a news conference, executives said they expected a dilution of 20 percent to 22 percent in the IPO, which means the company could be valued at 22.5 billion rupees after the share sale.
The sale will take place from March 21 until March 23, and trading is set to begin on or around April 4.
Although a comparatively small IPO, Infibeam's debut is widely expected to serve as a proxy for stock market investors' appetite for potential future offerings in the e-commerce sector, analysts and bankers said.
"E-commerce space is still in the early stages. There are a few business models that are yet to evolve. At the moment, we are happy to stay out and wait this opportunity out," said Mahesh Patil, co-chief investment officer, Birla Sun Life Asset Management.
Patil added that his fund would bet on India's growing consumption through investments in regular brick-and-mortar chains and logistic firms.
Infibeam's IPO comes at a time when valuations for Indian tech startups are under stress, with venture capital investors tightening their purse strings in an industry that has mounted millions of dollars in losses in pursuit of market share.
Adding to the concerns was a 27-percent mark down in market leader Flipkart's valuation by a Morgan Stanley fund in February.
Flipkart and Snapdeal, India's two biggest e-commerce operators, have not yet formally announced plans for going public, but bankers and insiders say both companies are considering a New York listing within the next two years.
As compared with its venture capital-funded rivals Flipkart and Snapdeal, which together raised billions of dollars through outside investments, Infibeam's boot-strapped business has grown modestly.
The firm, headquartered in Ahmedabad in the western state of Gujarat, reported a consolidated loss of 97.9 million rupees on a revenue of 2.95 billion rupees for the full fiscal year, ending March 2015.
For the next nine months, the company reported a consolidated profit of 65.8 million rupees, according to its IPO filing.
($1 = 67.2850 Indian rupees)
(Reporting by Himank Sharma; Editing by Kenneth Maxwell and Sherry Jacob-Phillips)
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Updated Date: Mar 16, 2016 01:30 AM