Avoid Infibeam Incorporation IPO: HEM securities

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BUSINESS OVERVIEW
Company is an e-commerce company focused on developing an integrated and synergistic e-commerce business model. It own and operate the Infibeam BuildaBazaar (BaB) e-commerce marketplace, which provides cloudbased, modular and customizable digital solutions and other value added services to enable merchants to set up online storefronts. As part of co's integrated e-commerce
ecosystem, co operate Infibeam.com, a multi-category e-retail website. Co's integrated business model enables it to provide comprehensive, multi-channel and multiscreen value added services to merchants. Co's business operations are broadly divided are as follows:
1) Infibeam BuildaBazaar e-commerce marketplace
2) Infibeam.com e-retail site

OBJECTS OF ISSUE
Company proposes to utilise the net proceeds from the Issue towards funding of the following objects:
1) Setting up of cloud data centre and purchase of property for shifting of the registered & corporate offices of company
2) Setting up of 75 logistics centres
3) Purchase of software
4) General Corporate Purpose

COMPANY’S STRENGTHS
1) Integrated e-commerce business model with a large merchant and customer base
2) Association with established brands
3) Established e-retail operations in India

Valuation
The company is bringing the issue at price band of Rs 360-432 per share which will turn up into p/e multiple of 145-174 on post issue H1FY16 annualized eps of Rs 2.48/ share. Though company has integrated e-commerce business model with a large merchant and customer base & has association with established brands but financial performance of company is not able to instil confidence of investing at present level. Also looking after the valuations of company,issue looks expensive at current level. Hence we recommend investors to "Avoid" the issue.