London stock market welcomes two new listings in tech and property


A video technology company and a property services supplier join the London Stock Exchange this week

Two firms join the London stock market this week, a video technology company and a property services supplier.

Falcon Media House, which owns patented technology that prevents buffering when streaming video online, listed this morning at a valuation of £14m after raising £4m.

The business, which already has deals in place with Tata, intends to use the funds to grow its content, scale and reach. It also plans to develop one of its distribution platforms into the “Netflix of sports”.

The “over-the-top” streaming market, online videos that do not require the viewer to subscribe to a traditional TV provider, is forecast to grow from $28bn in 2015 to $62bn by 2020. It has “ushered in a broadcasting revolution that has irrevocably transformed the way that millions of people across the globe choose, access and watch multimedia content”, according to executive chairman Gert Rieder. “We are tapping into the insatiable demand for a more personalised and flexible multimedia experience, and in turn establish Falcon into a UK leader in the market.”

Video tech firm Falcon Media House wants to build the “Netflix of sports”

On Wednesday, Dukemount Capital, a property and investment services company, will follow suit with a flotation valuing the company at approximately £1.5m.

The group intends to raise £1m, which will be used to source and structure its first real estate acquisitions and cover its listing costs.

The UK-based company plans to acquire, manage and develop UK residential and hotel properties, which are for the most part already pre-leased to housing associations on a long-term consumer price index-linked basis. Dukemount will then agree a sale and leaseback with institutions. These leases, typically more than 30 years long, are called as long-dated income.

Last year, a report published by Schroders showed that the potential demand for long-dated income could be on the order of £1.6 trillion. Dukemont chairman Geoffrey Dart, who has an established record in hotel development, said: “The board have identified a unique opportunity which we expect will help close the growing demand and supply gap for long-dated income by providing institutions such as pension providers higher income yields.”

Dukemount expects to be profitable within the first 12 to 18 months of ­listing.


HDFC Red CEO on How Drones and Machine Learning Can Improve the Real Estate Listings Business

HDFC Red CEO on How Drones and Machine Learning Can Improve the Real Estate Listings BusinessHDFC Red CEO on How Drones and Machine Learning Can Improve the Real Estate Listings Business
Builders themselves are very enthusiastic about adopting technology
By 2020, the digital natives, will be buying houses
Machine learning has the potential to be a real game-changer
The startup-within-a-big-company is a narrative that’s becoming increasingly popular, but Sohel I S, CEO of the property portal HDFC RED, feels that six years on, the mindset genuinely applies to his organisation, where the average age of the team is still 28.

“We’re able to make decisions quickly and don’t have to go through so much hierarchy and we’ve had to be very fiscally responsible,” Sohel tells Gadgets 360. This also helped the company have a relatively narrow focus from the beginning, something he says helped a lot.

While many of the best known companies in the property space in India got their start in the rental market, HDFC RED stayed out of that segment, focused instead on the buying and selling of private homes from the beginning.

Last year, announced layoffs and shut down its rentals; visit most of the other popular sites and the first option you now see is “Buy”. In some ways, RED was ahead of the time when it launched and Sohel sees the current trend as a validation of its business model.

“When we were getting started we talked about what all we should be doing, and we were clear that we aren’t going to try and do everything at once,” he says. “The problem with rentals is that there is a lot of demand, but the supply is very erratic. You’re spending money to acquire each listing, but that money is only good for about three weeks. In that much time, any house which is in a decent condition, where the rent is reasonable, goes off the market.”

“On top of that, the listing will be there on a dozen sites, and you’re all spending money to improve the quality of the listing and bring information,” he adds. “It’s just not really practical.”

On the other hand, the supply side for selling houses is a lot better, he explains. For one thing, builders are ready to pay to be on the platform. Additionally, you’re capturing the data for an entire project and not just a single house. And of course, the listings are live for a lot longer, so the money that is spent on getting and maintaining them is a lot lower in the long term.

Additionally, Sohel continues, the builders themselves are very enthusiastic about adopting technology. It’s a cost effective way to grow, and in a market where buyers are often not purchasing locally anymore – buying property in their hometowns while living elsewhere, for example – technology becomes essential to finding homes.

“Also what’s happening is that the second generation of builders is now taking over, the ones who grew up around technology and have a lot more exposure to the world,” Sohel explains, “and this means that people who are much more comfortable with technology, are much more immersed in technology, are the ones who are making the decisions now.”
And this is bringing about a big difference in the way buyers and builders are using technology. “Six years ago, people were worried that you wouldn’t buy anything online,” Sohel continues. “But when I saw people start to buy clothes online, I knew that this was possible.”

“Today, we use video conferencing for discussions, VR tours of the building to give you a 360-degree view of the apartments,” he adds, “and it’s been stopped now, because there’s not much clarity on what you can and can-not do with drones, but we were doing some really great things, like using drones to shoot the view from every window on every floor of the building, so you can decide if the 15th floor is right for you or the 20th.”

But all of this barely scratches the surface of how technology has been changing the real estate business according to Sohel. The real game changer, he believes, is artificial intelligence. “Machine learning has been moving too slowly if you ask me, mostly confined to the lab, but it’s a real game-changer,” he says. “Right now, there is a lot of data. And not much of it is useful to everyone, and it’s presented in a way that makes it hard to find the information you require.”

“What we can do is improve on the presentation of data to help you find the houses you need more easily. The next thing we do is congruence, where we help you to fine tune the data and come up with a filtered list that suits you,” he explains. “Then there are recommendations, where we can actually say we know what you like, we know what you really want, and these are the houses you should look at.”

HDFC RED has applied for a patent for its recommendation engine, and it uses everything from social profiling, to demography-based suggestions, but he admits that this is one area where further improvements are required. “I mean imagine if we know the kind of music you listen to, and what music other people like,” he says. “Maybe if we know that you’re someone who likes to listen to rock music, you’ll be better off with neighbours who like it too, so they won’t complain about your music playing late, right?”

It’s a slightly far-fetched notion, as he quickly admits, but it does show some of the ways in which the real estate business in India is changing. “Things like having an app for your property to showcase it, which then becomes an internal social network once the houses are sold,” he adds, “or setting up a VR zone to demo houses instead of having people come to the project unnecessarily, this is moving from being high tech to just hygiene.”

“By 2020, the digital natives, the ones who grew up with the Internet, will be buying houses,” he says, “and right now, we’re taking care of the search part of the equation. By then, you’ll have to have solutions for site visits, negotiation, payments, and paperwork for these buyers.”

Tags: HDFC, HDFC RED, Property Search, Real estate,


Japanese Chat App Line Soars in New York-Tokyo Dual Listings

Japanese Chat App Line Soars in New York-Tokyo Dual Listings

Shares of Japanese messaging app operator Line Corp surged almost 50 percent in Tokyo on Friday after soaring as much as 36 percent in their US market debut, valuing the startup at $9.3 billion (roughly Rs. 62,407 crores) in the biggest tech IPO this year.

The shares first traded in the Tokyo Stock Exchange at JPY 4,900, or 48.5 percent above their IPO price of JPY 3,300, helped by demand from investors hungry for a rare chance to invest in a tech startup.

In New York, the offering of 22 million American Depository Shares (ADSs) from the world’s seventh-most used messenger app company was well-accepted, with the shares closing at $41.58, well above the IPO price of $32.84.

“Considering that Line is little known in the United States, the IPO seems to be a success,” said a fund manager at a Japanese asset management firm.

(Also see:  Stickers to Stocks: Things to Know About Messaging App Line)

The Tokyo-based company’s decision to list first in New York is seen as a sign of its determination to challenge its global peers as it seeks to expand outside Japan and Southeast Asia.

Line is controlled by South Korea’s Naver Corp.

After the offering, Naver’s ownership dropped to 80.8 percent.

The app has a lot of ground to cover in major Western markets, where Facebook Inc’s Messenger and WhatsApp are dominant, and in China, where Tencent Holdings Ltd’s WeChat is popular.

As of March, Line had 218 million monthly active users (MAUs). WhatsApp leads the pack with about 1 billion MAUs, while Facebook Messenger is No. 2 with 900 million.

Line’s messaging app was launched in the aftermath of Japan’s 2011 earthquake and tsunami to overcome downed communications, growing unexpectedly to become the country’s dominant mobile messaging platform over the next few years.

The bulk of Line’s revenue comes from games and sales of emojis and electronic stickers. The company’s revenue and other operating income rose about 28.3 percent to 120.88 billion yen in 2015.

Line reported a loss of JPY 7.97 billion in 2015, compared with a year-earlier profit of 2 billion yen.

Morgan Stanley, Goldman Sachs, JP Morgan and Nomura are among the underwriters to the IPO.

© Thomson Reuters 2016

Tags: Apps, IPO, Line, Social, WeChat, WhatsApp

TeamLease, Quick Heal listings set grey market abuzz

According to one grey market dealer, TeamLease was fetching a premium of as much as Rs 240-250 per share on Monday before falling later. Photo: Hemant Mishra/MintAccording to one grey market dealer, TeamLease was fetching a premium of as much as Rs 240-250 per share on Monday before falling later. Photo: Hemant Mishra/Mint

Mumbai: The recent initial public offerings (IPOs) by staffing firm TeamLease Services Ltd and IT security solutions company Quick Heal Technologies Ltd are attracting high investor interest in the grey market.

That’s particularly of the TeamLease IPO that drew robust response before the initial share sale concluded on 4 February.

When the primary market picks up, the grey market starts buzzing with activity. High net-worth individuals (HNIs) are willing to pay a premium to buy shares in firms that are yet to list on exchanges.

The idea is to cash in on the strong gains seen on listing day.

According to one grey market dealer, TeamLease was fetching a premium of as much as Rs.240-250 per share on Monday before falling later; the premium on Quick Heal’s IPO, which opened on Monday, was in the range of Rs.60-70 per share before dropping.

TeamLease saw investors rush to subscribe to its IPO, leading to the issue being subscribed a little more than 66 times. The firm has priced the offering in a band of Rs.785-850 per equity share. At the upper end of the band, the firm will end up raising Rs.423 crore.

The allocation for institutional investors witnessed subscription close to 27 times, while retail investors and HNI investor categories were subscribed 10.6 and 185.2 times, respectively.

The employees’ category was subscribed 1.3 times the number of shares reserved.

As of 5pm on Monday, Quick Heal IPO was subscribed 0.15 times on its first day of subscription.

“TeamLease is seeing excellent response. The last time, we saw such huge response in the grey market was with Syngene,” said a dealer from Mumbai, who requested anonymity, referring to the offering by Biocon Ltd’s contract manufacturing unit that debuted in August.

Syngene International Ltd’s shares rose more than 24% on debut and are currently trading 59% higher from its issue price.

Another dealer from Mumbai said the premium dropped toRs.200-210 for TeamLease and Rs.40-50 for Quick Heal in Monday’s trading.

“Generally, it depends on how the subscription is going on. It changes as the market sentiment changes. It all depends on how much premium people expect at listing,” the second dealer said.

The grey market is usually driven by HNIs, who put in bids to subscribe to large chunks of an IPO, far in excess of the portion reserved for them. This pushes the overall subscription levels for the issue and, in turn, attracts investors to buy shares in the grey market at a premium.

The dealers said that the IPO of Precision Camshafts Ltd, the first IPO of calendar year 2016, had started with a premium of Rs.20 per share and rose to Rs.32-33 per share, but, a few days before listing, dropped to a discount of Rs.5-7 per share.

The Precision stock debuted 12.3% lower to its issue price on its listing day on Monday.

The issue was subscribed 1.89 times.

The auto component manufacturer opened its initial share sale on 27 January to raise Rs.400 crore from the primary market. The issue closed on 29 January.