There is good news available for the Info Edge shareholders and investors. What is this news and how it is good for the company? Let’s discuss this a bit, in this blog.
Introduction:
Info Edge is India’s premier online classifieds company with a portfolio of brands. It owns various brands in different fields like naukri.com (online recruitment), 99acres.com (online real estate), jeevansathi.com (online matrimonial) as well as shiksha.com (online education information services). It also acts as an investor and has invested in many start-ups in the online space and is actively growing its investment portfolio.
Key Positives:
1) Successful Listing of Zomato:
- The listing of Zomato was highly successful which was listed at Rs. 125 against the issue price of Rs. 75.
- Until now, the Zomato stock has marked the highest levels of Rs. 151 which is more than 100% Upside against the issue price.
- The Current Market Capitalization of Zomato is around Rs. 1,10,813 Cr. wherein the stake of InfoEdge is 15.23% which amounts to the valuation of Rs. 16,876 Cr.
- While the current market capitalization of Info Edge itself is over Rs. 86,000 Cr.
- The listing of one of the invested businesses has proved to be a value unlocking moment for the company.
- Initially, Info Edge invested around Rs. 50 Cr. in the Zomato during 2008.
2) Expected IPO of Policybazaar:
- Another investment company of Info Edge- Policybazaar can also soon come up with its Initial Public Offer (IPO).
- Policybazaar has filed Draft Red Herring Prospectus (DRHP) with SEBI and soon it may be approved and get public.
3) Info Edge (India)- Existing Business:
- Info Edge is primarily engaged in online and offline services through: Naukri.com, Shiksha.com, Jeevansathi.com, 99acres.com, and Offline Portal Quadrangle.com.
- These all business are performing very well.
- All of these businesses are online internet-based businesses wherein there is no major capital investment is required, and hence the company is generating a very good positive free cash flow from its standalone businesses.
4) Operating Leverages:
- The company enjoys healthy operating leverage as the volume increases for the company.
- One of its businesses, Jeevansathi.com might be benefited in the coming period due to delays in marriages during the Covid-19 pandemic, this number is as high as 1 Cr. to 1.5 Cr.
- Also, the real estate sector is looking to be in an improving phase after a long period of consolidation, wherein another business of the company 99acres.com could also be benefitted.
- The Higher Operating Leverages with Rising Volumes leads to Strong Retained Earnings and Positive Free Cash Flows.
- Further, these retained earnings are utilized in Investment for New Start-Ups.
5) New Investment in Start-Ups:
- Info Edge uses its Healthy Retained Earnings to invest in Start-Up Companies.
- In the last 8 months, Info Edge made New Investments in around 15 New startups.
- In these 15 New Start-Ups, the total investment is $161 Million or Rs. 1,200 Cr. in Indian Rupee Terms.
- Out of these total investments in new Start-Ups, Rs. 600 Cr. is invested after the successful listing of Zomato.
Conclusions:
If you are an aggressive investor and want to invest in startups, but are unable to invest directly, then Info Edge stock can be a great option. Info Edge is like a Start-Up fund and it is a great long-term story. This is not direct investment advice and hence one should research properly and assess his/her risk profile before making an investment decision.
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