Bulgarian telecom and mobile services provider Allterco launched an IPO on the Bulgarian Stock Exchange in the end of September, offering 1.5 million new shares at a price range of BGN 1.10 – 2.20 per share. The capital to be attracted is to fund the further IoT expansion of the company.

Subscription ends October 19th, 2016 with smaller IPO size entailing mostly retail investors’ interest. With a free float of c.10% the latter to be key liquidity driver post the offering, wrote ELANA Trading analysts in their IPO research note.

Who is Allterco

Allterco is a niche mobile value added services (MVAS) provider present in 7 countries on 3 continents with major operations in Bulgaria and the Balkans as well as Singapore and South East Asia. Operations in the US delivering 10%+ of the Group’s top line, currently. The Company provides full range technical connectivity, mobile marketing and notifications services with a broad range of customers from telecom to finance, content and e-commerce providers.

Mobile value added services growth decelerating

Allterco’s top line growth stagnated with 2.5% CAGR over the past three comparable years, with the last two turning negative. Margins slashed from higher single digits operating margins to lower single digits. Key reasons for the latter are continuous telecommunication regulatory changes both in Europe and South East Asia, stagnating telecom sector and volatile sales expenses as the Company works to tap on new growth opportunities.

2016 major turnaround with Internet of Things pivot

Allterco underwent a major restructuring at the end of 2015 and did a considerable operations pivot. It entered the Internet of Things (IoT) market by developing wearables and home automation devices. First product on the market, kids smart watch MiKy, already outperforming initial management expectations.

Find out more in the IPO research note by ELANA Trading analysts