Matrimony.com IPO opens today: Should you invest?
Matrimony.com Ltd (Matrimony) is one of the leading providers of online matchmaking services in India. It has two business segments – matchmaking services (96% of FY17 revenue) and marriage services (4%).The company has one of the largest databases (3.08 million active profiles as of Jun’17) on its portal. It owns brands like Bharatmatrimony.com , EliteMatrimony.com, AssistedMatrimony.com and CommunityMatrimony.com. The offer (price band: Rs 983 – 985) consists of an offer for sale (OFS) and fresh issue. OFS is from private equity (Rs 325 crore) and promoters (Rs 46 crore). The fresh issue of Rs 130 crore, will be used for repayment of debt (around Rs43 crore), purchase of land for office (around Rs 43 crore) and advertising (Rs 20 crore). Although there could be fancy on the street for such a kind of consumer focused internet services company, but owing to weak financials (net losses in the past and erosion of net worth) we are not comfortable recommending the IPO. At t...