Route Mobile shares correct 24% in 3 weeks but experts remain bullish

Shares of Route Mobile, the cloud communication platform service provider, rallied 168 percent in a week after listing on September 21, but in last three weeks, it corrected 24 percent from the highest closing price of Rs 938.6 per share on September 25.

The profit-booking was on expected lines given the surge after listing, but experts are not worried about this correction due to the company's strong business profile and model.

"We believe this correction could be due to profit-booking by anchor investors as anchor investors lock in a period of 30 days from the date of share allotment is over. Investors can use such opportunities of correction to add positions in the stock," Keshav Lahoti - Associate Equity Analyst at Angel Broking told Moneycontrol.

"We are bullish on the company considering that it is a scalable business model, which can grow without capital infusion. Past track record of the company is also quite promising," said Lahoti who expects the company to continue to grow at 25-30 percent for at least next 2 years.

Route Mobile had a strong debut with a 105 percent premium over issue price on September 21 at Rs 717 and from listing price, the stock had further rallied 38 percent to touch an intraday all-time high of Rs 988.

Marquee investors such as Goldman Sachs, Sunil Singhani's Abakkus Fund, Kuwait Investment Authority and Pinebridge Global Funds already have a stake in Route Mobile.

On October 16, the US-based hedge fund Theleme Master Fund also acquired fresh 1.35 percent equity stake in Route Mobile via open market transactions.