While the details of the valuation of Infibeam are yet to be revealed, the company made it through its public offering. While the start was rocky, by close of the IPO subscription window the stock was oversubscribed 1.1 times. This was thanks to the retail and non-institutional investors who oversubscribed the stock 1.31 and 2.23 times respectively. There was little attention from qualified institutional buyers who gave the stock a muted response and subscribed only 86 percent of the total number of shares reserved for them.
The question would be what the company would use this money for. In 2010, like Flipkart, the company was selling books before it plunged in to the marketplace model in 2012.
Did they read the market right?
The promoter group must have gone to the bourses to save themselves from becoming takeover targets. They must have realised that venture capital money is slowing down its bets in India and therefore listing was the only way to gain credibility. Vishal Mehta, the founder of Infibeam, has quoted that none of the existing promoter group members are going to exit after the IPO.
In the meantime they must figure out a model that is sustainable for the Indian market because as of now the e-commerce industry tends to bleed over customer acquisition. Being listed brings in the financial discipline and adds a lot of checks and balances to improve processes. That said the company has to thrive over the next two years or it can be bought by a large e-commerce company whose IPO will eventually be accepted by a new generation of stock market investors.