22 August 2024 01:35 am Views - 2608
By Nishel Fernando
Sri Lanka’s top ride-hailing app PickMe plans to raise up to Rs.1.6 billion by offering a 13.04 percent stake in the company through an initial public offering (IPO) on the Colombo Stock Exchange (CSE).
The company plans to offer 43,474,179 ordinary voting shares, attractively priced at Rs.36 per share, which is an immediate upside of 20.8 percent to an incoming investor on the value per share of Rs.43.49 derived from a three-year discounted cash flow valuation.
The initial listing application to list the shares of the company has already been submitted to the CSE for listing approval. Within nine years since its inception, PickMe has cemented its place as Sri Lanka’s best-known mobility player. PickMe currently accounts for 70 percent market share in Sri Lanka’s ride-hailing market and it maintains a 4 percent market penetration in tuk drivers. With an over 75,000 vehicle fleet and over 880,000 unique monthly customers, PickMe currently operates in five distinct verticals with ride-hailing vertical accounting for 78 percent of its revenue, followed by food (12 percent), flash (4 percent), trucks (5 percent) and market (one percent). In particular, food, flash and truck verticals have recorded triple-digit growth rates since the inception.
In the 2024 FY, PickMe reported a net profit of Rs.679.45 million on a Rs.7.05 billion revenue, compared to Rs.130.46 million profits on Rs.3.17 billion revenue a year ago. At the end of 2024 FY, PickMe had a Rs.2.82 billion asset base, with a 49 percent return on equity ratio. In the current FY, the company is forecast to record Rs.1.31 billion profits on a Rs.10.72 billion revenue, with a 24 percent year-on-year growth in net margin. PickMe maintains a clean record as a zero-geared company, with no external debt. After having introduced four new business verticals in the last four years, PickMe plans to expand further, achieving critical mass and economies of scale, allowing for increased net margins in a still underpenetrated market, where local expertise remains to be the key for both for customers and drivers.
Capital Alliance and CTCLSA have been appointed as joint managers to the proposed issuance, which is named as ‘Project Yellow’.
PickMe is the official brand of Digital Mobility Solutions Lanka Limited, a software service provider, founded in June 2015. Ajit Gunewardene is Founder Chairman of Digital Mobility Solutions. PickMe is also backed by globally recognised investors, including International Finance Corporation, Interblocks Holdings Pte, LOLC Technologies Limited, H Capital (Pvt.) Ltd (a subsidiary of Hirdaramani Group), Invenco (Pvt.) Ltd (subsidiary of the Brandix Group) and Amaliya (Pvt.) Ltd.