MobME to raise funds through share issue at NSE’s SME exchange. A new trend in the making?

Mobile value added services provider MobME is planning to raise funds from the markets through an Initial Public Offering at the Small and Medium Enterprises Exchange on the National Stock Exchange.

The Kerala based startup is one of the first startups from Kerala to take the IPO route to raise funds.

The SME Exchange called “Emerge” on the NSE, started operations in September and was expected to bring down cost of financing down by 5 % or more for small businesses.

“We are preparing the DRHP (Draft Red Herring Prospectus) is the only statement what we can officially say,” Sony Joy, co-Founder at MobME Wireless Solutions Private Limited told NBW.

The company founded in 2006 in Trivandrum Technopark, announced its intentions to raise funds from the SME exchange yesterday and said that it has appointed bankers already.

MobMe providers value added services to telecom operators like Vodafone, Airtel, Idea and others. Recently, MobMe partnered with Dutch security leader Gemalto and Valimo Wireless Oy of Finland to roll out mobile digital signatures for secure logins and transactions in India.

According to PwC, the Indian mobile value added services market is expected to generate over $10 billion in the next four years. The report, Value Added Service: The Next Wave published in 2011, said that by 2015, overall revenues from communications services will cross Rs 20,000 crore while total revenues from entertainment services would reach Rs 25,000 crore while Information services is pegged at Rs 7,900 crore.

Mobile VAS comprises of music, videos, Interne, ringtones, MultiMedia messages, among other mobile enabled services like Banking transactions.

Management consulting firm Zinnov says that the MVAS market in India, currently valued at over $5 billion will cross $6 billion in 2013. India has over 900 million wireless subscribers with a growing appetite for buying mobile based services.

Larger companies like OnMobile and One97 also fall into the MVAS category.

MobME’s decision to raise funding from the SME exchange is an interesting one. Maybe it will start a new trend with startups looking to raise money from the public market and skipping the Private Equity/ Venture Capital route? What do you think?

Recommended read: Mobme brings mobile SIM based digital signatures to India – Three things you must know

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