Can I invest in the Indiamart IPO and what is the company going to use the proceeds of the IPO for?
Answer
Answer
Indiamart IPO opens on June 24th at the price band of Rs.970-973. There will be no fresh funds raised as this an offer for sale. Under an OFS, the existing shareholders sell their shares to the public. So the shares change hands but capital does not change and no fresh money comes into the company. In this case, some of the early investors like Intel Capital and Amadeus are among the sellers. The promoters are also selling a part of their stake in the company through the OFS.
The experience in the past has been that the OFS does not get a good response in the market since anchor investors exiting the stock normally happens at fairly stretched valuations and hence the upside room may be limited. A better way would be waiting for the stock to list and then take a call. You could end up getting a better price.