Matrimony.com Pvt Ltd, which owns a string of matrimony-related consumer internet properties including BharatMatrimony.com, EliteMatrimony.com, CommunityMatrimony.com, AssistedMatrimony.com, MatrimonyDirectory.com and Tambulya.com, has filed its draft red herring prospectus (DRHP) with securities market regulator SEBI to float its initial public offer (IPO).
It is the second new consumer internet firm to file documents to go public in India this year after e-commerce firm Infibeam.com.
The company, which is known for its flagship property BharatMatrimony.com, is looking to raise Rs 350 crore ($53.6 million) through a fresh issue besides an offer for sale by Bessemer Venture Partners that is looking to exit in the issue. Some other private investors along with mother of the company's founder and CEO Murugavel Janakiraman are also selling shares in the IPO.
The issue size would be clear when the company freezes its price band but it is expected to be just a tad short of what Just Dial issue raised. Local business search venture Just Dial had gone public two years ago through an offer for sale issue where its selling shareholders got a little over Rs 900 crore.
Matrimony.com is the second large company to file DRHP this month. Last week drugmaker Alkem Laboratories filed its papers to raise funds through an IPO. Since January this year, over two dozen companies have approached SEBI for IPO.
Here's a snapshot of the IPO:
Fresh issue by the company to raise Rs 350 crore besides offer for sale of 1.66 million shares by Bessemer Venture Partners, Draper Investment Co, Hartenbaum Investment Trust and Indrani Janakiraman.
Bankers: Kotak Investment Banking, Citigroup Global Markets and Deutsche Equities India.
Started in 1997, Matrimony.com comprises three segments â€“ matchmaking services, marriage services and related sale of products and other services which include mobile-only relationship app Matchify. It started offering online matchmaking services in 2001.
As of March 31, 2015, the firm had 2.65 million active profiles (being profiles that have been published or logged in at least once during the prior 180-day period).
It claims it had 568,000; 571,000 and 647,000 paid subscriptions in fiscal years 2013, 2014 and 2015, respectively.
It says it differentiates from other players in India by following a micro-market strategy whereby it offers a range of targeted and customised products based on customers' linguistic, religious, caste and community preferences as well as personalised matchmaking services such as AssistedMatrimony and EliteMatrimony.
Matrimony.com recently launched MatrimonyPhotography.com to provide wedding photography and videography services, in Tamil Nadu and Kerala. It also introduced MatrimonyDirectory.com for marriage-related directory services, including listings for wedding venues, wedding planners, wedding cards and caterers.
The company competes with the likes of People Group's Shaadi.com, Info Edge's Jeevansathi and Times Internet's SimplyMarry. Then there is a string of new-generation startups which have launched dating style digital properties with the idea of attracting younger generation users as a pre-cursor to facilitate their marriage.
Its consolidated net revenues more than doubled in the four years between FY11 and FY15. The company closed the year ended March 31, 2015 with net revenues of Rs 232 crore, up over 16 per cent compared with the previous year.
Its EBITDA or operating profit grew over four times in the last four years and it ended FY15 with EBITDA of Rs 17.8 crore.
The company also cut down its net loss last year from Rs 9.16 crore to Rs 2.92 crore. The firm had posted a net profit of Rs 10.4 crore in FY13. It was in the red previously.
Use of IPO proceeds
Close to half of the money the company will get from the fresh issue of shares in the IPO will be used for advertising and business promotion activities (Rs 150 crore). The rest is to be used for purchase and development of office premises in Chennai for the product development team (Rs 34.4 crore); repayment of overdraft facilities (Rs 28.74 crore); procurement of hardware and software requirements for a centrally controlled contact centre (Rs 17.4 crore); and other general corporate purposes.
Bharat Matrimony had attracted a string of investors in the past including VC firms Canaan Partners and Mayfield besides internet major Yahoo. Yahoo had exited the company by selling its entire stake for over $17 million in 2012. The stake was purchased by Bessemer Venture Partners besides other existing VC firms.
Bessemer currently owns close to 10 per cent stake which will shrink to around 6.6 per cent on conversion of preference shares held by other VC firms. It is now selling out by offering its entire holding.
Canaan, one of the early investors, owns around 23 per cent of the diluted equity capital of the firm making it the top investor in Bharat Matrimony. Canaan's stake was acquired by JP Morgan Partners as part of a larger portfolio buyout of the VC firm in India by the American financial services major early this year. This means JP Morgan will be the top non promoter shareholder post IPO.
Mayfield, another early investor, has decided to stay put in the IPO. It owns around 11 per cent as of now.