Arrange marriages rule India: Matrimony reaps IPO gain without pain

If you think that the new age dating apps like Tinder and Woo will change the way people in India think and get to profitability, think again as matrimony still rule the Indian market. The best example is Matrimony.com, which is among a few profitable digital ventures in the country.

Online match making firm initial public offer (IPO) on Wednesday has been subscribed 441% on the last day of the issue.

When many online sites struggle manage losses, the Rs 500-crore IPO of online match-making portal received bids for 1,24,09,980 shares against the total issue size of 28,11,280 shares, data available with the NSE showed.

“We are indeed overwhelmed by the response to the IPO, and I would like to thank the public and all our investors for reposing confidence in the positive and unique story of Matrimony.com,“ said founder Murugavel Janakiraman who started business in 1997.

The firm runs online match-making business under the BharatMatrimony brand. The Matrimony.com, which operates websites such as BharatMatrimony.com, CommunityMatrimony.com, and EliteMatrimony.com. The founder claims to have 26 million users on their sites. Bharatmatrimony.com’s mobile app has five million downloads.

Matrimony.com, which launched its IPO on September 11, has raised Rs 225.9 crore by allotting 22.93 lakh shares to anchor investors.

The match making site has paved way for many trendy sites and apps. The first online matchmaking portal, Shaadi.com, was established in 1996.

Last year, Matrimony.com earned Rs 292 crore in revenue and made a profit of Rs44 crore, Quartz quoted Janakiraman.

After hitting profit, the firm planning to go beyond matchmaking, leverage its brand to offer wedding-related services, too.

Earlier in July, Matrimony got the final observation letter, from the Securities and Exchange Board of India (SEBI) for the IPO. More than 4000 employees work at over 20 offices across India. The company also has offices in the US and Dubai.

It is looking to raise Rs 130 crore through a fresh issue while an offer for sale (OFS) has been made for 3.77 million shares (3,767,254 equity shares) at a price band of Rs 983-985 per share by the promoters and some investors, including private equity firms Bessemer Venture Partners, JPMorgan Asset Management and Mayfield. The company is being valued at about Rs 2,225 crore.

The company had gone through many rough phases in its journey. It posted losses of Rs 9.16 crore in FY14 and Rs 2.93 crore in FY15. For the fiscal year ended March 2013, Matrimony posted a profit of Rs 10.41 crore.

Matrimony.com reported revenues of Rs 242.85 crore for the FY15. Majority of the company’s revenues came from its match making services (Rs 231.99 crore) followed by marriage services (Rs 7.35 crore) and sale of products (Rs 2.07 crore).