Affle India: Information Analysis

The mainstream IPOs have been few this year, with just five being reported in the past seven months. Several factors, including the ongoing slowdown and liquidity crunch, can be held responsible for this. At the time of writing this report, the Sensex has already fallen by more than six per cent from its all-time highs seen during the general elections. Affle (India) has come up with a Rs 459-crore IPO as the first ad-tech company to be listed in India. An ad-tech company generates traffic for clients. Think an entertainment portal like Alt-Balaji. An ad-tech company that it engages, brings users and traffic to its app and contents. This one-of-a-kind company has expertise in various aspects of digital advertising, with its clients present in India and abroad. This provider of mobile advertising solutions has two business segments - the consumer platform and the enterprise platform. The consumer platform provides services like attracting new customers through mobile advertisements, retargeting existing customers for e-commerce clients and increasing customer base for online to offline businesses. Driven by the cost per converted consumer model (CPCU), this segment accounted for 97 per cent of the company's consolidated revenues in FY19. The second segment provides end-to-end solutions for enterprises, such as developing apps and providing enterprise-grade data analytics for online and offline businesses. During the same period, this segment accounted for a mere three per cent of the company's revenues. Over the past one-and-a-half-year, Affle has acquired three companies, namely Vizury, RevX and Shoffr to consolidate its consumer platform. The company has run mobile advertising campaigns for some of the largest e-commerce brands and mobile apps in the world, such as Amazon, Flipkart, Goibibo, BookMyShow and also domestic players like ALTBalaji, among others. The company has no direct listed peers in India. In such a situation, we have made a peer comparison with other digital advertising firms like InfoEdge, Just Dial and IndiaMart. Strengths The company provides ad-tech solutions across the value chain of digital advertising, fraud detection and ad network. The business is built on a low-cost, asset-light model, which gives room to generate profits and scale its business. With a