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Friday, 26 July 2019
CM RATING 43/100

Affle India

Monetising internet/mobile data

Delivers consumer acquisitions for B2C companies, through relevant mobile advertising. However business model continuously challenges the Right to Privacy

Incorporated in 1994 as Tejas Securities Pvt ltd and subsequently acquired by Mr. Anuj Khanna Sohum and Affle Holdings in 2006, Affle India (AF) is a global technology business company that delivers consumer acquisitions for B2C companies through relevant mobile advertising with a proprietary consumer intelligence platform (Consumer Platform). It is also engaged in Enterprise Platform which provides end-to-end solutions for enterprises to enhance their engagement with mobile users

The Consumer Platform (CP) delivers new consumer acquisitions, engagements and transactions through relevant mobile advertising. The CP aims to enhance returns on marketing spend through delivering contextual mobile ads and reducing digital ad fraud. As at March 31, 2019 on a Proforma Basis, Affle had approximately 202 crore consumer profiles and accumulated over 30000 crore data points over the preceding 12 months. The Company has three registered patents in the United States with multiple patent claims and has also filed ten patent applications in India. Of the 202 crore consumer profiles, approximately 57.1 crore were in India, 58.2 crore were in Other Emerging Markets (which comprises Southeast Asia, the Middle East, Africa and others) and 86.7 crore were in Developed Markets (which comprises North America, Europe, Japan, Korea and Australia).

The Company primarily earns revenue from the Consumer Platform on a cost per converted user (CPCU) basis, which comprises user conversions based on consumer acquisition and transaction models. The consumer acquisition model focuses on acquiring new consumers for businesses (i.e. targeted user downloading and opening an App or engaging with an App after seeing an advertisement delivered by Affle). The transaction model is usually in the form of a targeted user submitting a lead acquisition form or purchasing a product or service after seeing an advertisement delivered by Affle.

For Fiscal 2019 on a Proforma Basis, revenue from Consumer Platform and Enterprise Platform was 97.2% and 2.8%, respectively of revenue from operations.

AF has run campaigns for (1) e-commerce and mobile app companies (Amazon, Flipkart, Jabong, BookMyShow, Wynk, ALTBalaji, PhonePe, Gojek, Spotify, Goibibo, Zee, Dunzo, Dailyhunt, Meesho, Games 24x7, Shipt) and (2) Reputed companies (Airtel, Reckitt Benkiser, Johnson & Johnson, McDonalds, Nissan, Air Asia, Axis Bank, Citibank, BTPN).

AF’s platform consists of proprietary machine and deep learning algorithm for prediction and recommendation that operates in real time and at significant scale

AF’s mFaaS platform helps to detect fraud on a real time basis, thus minimizing wastage of marketing spend. mFaaS has been recognized and awarded as the industry-wide Best Big Data Technology Platform of the Year at the IAMAI India Digital Awards in 2017 and was awarded Gold for the Best Technology Platform at the DIGIXX Awards 2019.

AF has increased its breadth of service offerings, especially to e-commerce and mobile app driven companies, following the acquisitions of Vizury Commerce Business, RevX Platform and Shoffr Platform. The Company is in the process of integrating the consumer profiles and the related consumer data points of the acquired platforms with Consumer Platform.

Corporate Restructuring in connection with the IPO

In connection with the Offer, Affle undertook a corporate restructuring in which they incorporated the Singapore Subsidiary and it acquired all of Affle Global‘s business, intangible assets and all of the equity interests in the Indonesian Subsidiary, effective July 1, 2018. Affle Global was engaged in the same business as the company ("Affle") outside India and Indonesia and used Affle’s solutions. The Indonesian Subsidiary was engaged in the same business as the company ("Affle") in Indonesia and used Affle’s solutions. Affle Holdings, the corporate Promoter, owns 100% of the issued shares in Affle Global.

Affle’s individual Promoter, Anuj Khanna Sohum, is the promoter of Affle Holdings. Further, he also controls Anuj Khanna Investments Pte. Ltd., and Fess Old New Pte. Ltd., the shareholders of Affle Holdings, the corporate Promoter of Affle (India) Ltd.

With effect from September 1, 2018, the Company acquired Vizury Commerce Business in India, associated records, the brand name "Vizury" and other intellectual property rights and domain name credentials in India and the new Singapore Subsidiary acquired the brand name "Vizury" and certain other intellectual property in connection with the Vizury Commerce Business in Dubai and Singapore.

The Singapore Subsidiary acquired the brand name "Vizury" and certain other intellectual property in connection with the Vizury Commerce Business in Dubai and Singapore from Vizury Dubai and Vizury Singapore, both of which are affiliates of Vizury India. Vizury branded consumer platform retargets media business for e-commerce companies and push notifications offerings for e-commerce companies on software as a service model.

Affle Holding, the Singapore headquartered parent entity is holding sizeable stake in the company with other equity partners i.e. Microsoft, D2C, Itochu, Centurion Investment Management and Bennett Coleman & Co. Ltd. Post issue along with Malabar group (who acquired 2.85 lakh shares at Rs 711 and 16.16 lakh shares at Rs 720.5 in July 2018), their combined shareholding will be around 75%.

The Offer and the Objects

The offer comprises of Fresh offer of Rs 90 crore which at lower price band of Rs 740 per share, works out to 12.16 lakh shares and at higher price band of Rs 745, the issue size works out to 12.08 lakh shares.

The offer also comprises of offer for sale of 49.53 lakh shares which at lower price band of Rs 740 per share, works out to Rs 366.52 crore and at higher price band of Rs 745, the issue size works out to Rs 369 crore. The selling shareholders comprises of Promoter Affle Holdings.

The minimum bid lot is 20 equity shares and in multiples of 20 equity shares. The issue is made through the book-building process and will open on 29 July and will close on 31 July.

The objects of the issue is to use Rs 69 crore towards working capital requirements and rest for general corporate purpose apart from getting the benefits of listing the equity shares on the BSE and the NSE and to enhance its visibility and brand image and provide liquidity to its existing shareholders.


Affle operates in the large and fast growing India digital advertising market; with the total spend likely to grow at a CAGR of 28.6% to USD 4 Billion by 2022. Mobile advertising is the key driver for digital advertising and is expected to grow at a CAGR of 32.7% to reach USD 1.9 Billion in 2022

AF is a leading ad tech solution provider in India with 57.1 crore consumer profiles as at March 31, 2019 on a Proforma Basis and is one of the very few companies that have products spanning the entire value chain in India. Affle provides services across the value chain in digital advertising, spanning the areas of DMP, DSP/SSP, fraud detection and ad network.

The Indian market presents high barriers to entry given its unique challenges and the company’s extensive consumer profile data, proprietary technology and local knowledge make it better placed compared to global peers to deliver profitability in India.

Having significant number of consumer profiles, enables the company to expand into markets and deliver results to customers more quickly and at lower costs compared to other global peers in India.

The company also addresses digital fraud and data safety issues that are prevalent in the industry and would increase going forward with technology advancement taking place.

Affle also provides end-to-end solutions for enterprises to enhance their engagement with mobile users, such as developing Apps, enabling offline to online commerce for offline businesses with e-commerce aspirations and providing enterprise grade data analytics for online and offline companies

Company’s business is asset light and scalable as shown by the fact that their employee benefit expenses, depreciation and amortization expenses and other expenses have remained relatively unchanged despite significant changes in their revenue in the last 3 fiscal years.

Company’s platform is supported by a flexible and scalable infrastructure, built in-house using cloud computing infrastructure and consists of their proprietary machine and deep learning algorithm for prediction and recommendation that operates in real time and at significant scale.


Change in technology and regulatory norms including privacy breach clauses can significantly affect the manner of business and financials of the company. Any restrictions on collection and use of the data or consumer resistance of sharing the data can also affect the way of doing business and the financials going forward.

Legal developments including legal actions by regulators and consumers relating to data protection and self regulatory developments can affect the business model significantly going forward. The company’s business model continuously challenges the Right to Privacy which is a fundamental right.

Regulators globally are also imposing greater monetary fines for privacy violations and some regulators may pass legislation that would impose fines for privacy violations based on a percentage of global revenues. The recent incident of Facebook where the firm was charged US 5 Billion in a case of violation of data privacy of consumer is one such case.

Highly competitive market and rapidly changing with multiple regional and global players

Business is concentrated around key customers. On standalone basis, top 10 customers account for 72.9%, 81.9% and 63.4% of total revenues for FY 19, FY 18 and FY 17 respectively. Revenue from Top most customer accounted for 46.6%, 61.2% and 34.3% of total revenues for FY 19, FY 18 and FY 17 respectively. 4 of the Top 10 customers are global advertising agencies.

Exposed to forex risks as 70% of revenues come from global markets.

Exposed to global regulations and compliances breach of which can lead to severe financial penalties

Significant delays in depositing Regulatory dues, statutory dues, filing of related party transactions with Registrar of companies.


For FY 2019, standalone net sales were up 41% to Rs 117.79 crore. The OPM stood at 21% up by 100 bps thus resulting in OP of Rs 24.75 crore up by 48%. Other income stood at Rs 3.65 crore up by 226%. Interest cost stood at Rs 0.45 crore down by 59% while depreciation was higher by 37% to Rs 4.41 crore. Thus PBT stood at Rs 23.54 crore up by 73%. After 44% increase in total tax to Rs 6.86 crore, standalone PAT for FY 2019 stood at Rs 16.68 crore up by 89% YoY.

For FY 19 financials (after consolidating Vizury Commerce Business), consolidated net sales stood at Rs 249.4 crore. OPM stood at 28.2% resulting in OP of Rs 70.31 crore. After providing total tax of Rs 10.98 crore, consolidated PAT stood at Rs 48.82 crore. The prospectus gives consolidated figures for only one year (FY 19) and hence any comparison with prior years in not possible.

Moreover the FY19 consolidated financials do not factor in acquisitions of the RevX Platform Business on June 28, 2019, effective April 1, 2019, and the Shoffr Platform Business on May 18, 2019, effective February 19, 2019. 

The standalone EPS of the company for FY 19 on diluted equity share capital of Rs 25.50 crore (at higher price band of Rs 745) of face value of Rs 10 each stands at Rs 6.5. The consolidated EPS for FY 19 stands at Rs 19.1. At higher price band of Rs 745, the issue is offered at P/E of 113.9 times FY 19 standalone earnings and 38.9 times FY 19 consolidated earnings.

The company has no listed peers.

Affle India: Issue highlights

Offer for sale ( in Rs crore)  
- On lower price band 366.52
- On upper price band 369.00
Total Issue size for offer for sale ( in no of shares in lakh) 49.53
Fresh Issue (in no of shares in lakh)  
- On lower price band 12.16
- On upper price band 12.08
Total Issue size for Fresh Issue (in Rs crore) 90.00
Price Band (Rs) 740-745
Bid size ( in no of shares) 20.00
Post issue share capital (Rs crore) 25.50
Post-issue Promoter & Group shareholding (%) 68.4%
Issue open date 29-07-2019
Issue closed date 31-07-2019
Listing BSE, NSE
Rating 43/100


Affle India: Standalone Financials

  1503(12) 1603(12) 1703(12) 1803(12) 1903(12) 1903(12)$
Net Sales 39.33 72.43 65.63 83.76 117.79 249.40
OPM (%) 4.7% 7.9% 5.4% 20.0% 21.0% 28.2%
OP 1.85 5.71 3.52 16.77 24.75 70.31
Other in. 0.13 0.27 1.17 1.12 3.65 0.40
PBDIT 1.98 5.98 4.69 17.89 28.40 70.71
Interest 0.15 0.87 1.59 1.08 0.45 0.81
PBDT 1.84 5.11 3.11 16.81 27.96 69.90
Dep. 0.11 0.26 2.31 3.21 4.41 10.10
PBT 1.73 4.86 0.80 13.60 23.54 59.80
EO 0.00 0.00 0.00 0.00 0.00 0.00
PBT after EO 1.73 4.86 0.80 13.60 23.54 59.80
Tax (including Deferred Tax) -0.53 -0.15 0.47 4.77 6.86 10.98
PAT 2.26 5.01 0.33 8.83 16.68 48.82
EPS* 0.9 2.0 0.1 3.5 6.5 19.1
*EPS is on post issue equity capital of Rs 25.5 crore of face value of Rs 10 each
$ Consolidated figures
Figures in crore
Source: Capitaline Database