eMudhra IPO Subscription Day 2: eMudhra IPO will be open for subscription on Monday, May 23, 2022, and will remain open till Wednesday, May 24, 2022. The company, which is the largest licensed certified authority (CA) in the digital signature certificates market in India, intends to garner about Rs 413 crore through a fresh issue of equity shares aggregating up to Rs 161 crore and an offer for sale of 9,835,394 equity shares aggregating up to Rs 252 crore by the shareholders and promoters. The company is engaged in the business of providing digital trust services and enterprise solutions like individual and organizational certificates, digital signature certificates, etc. A day before the offer opened to the public, eMudhra said that it had raised Rs 124 crore from anchor investors ahead of its initial public offering. Aditya Birla Sun Life Mutual Fund (MF), Motilal Oswal MF, Nippon India MF, SBI MF, Baring Private Equity India, Hornbill Orchid India Fund, Pinebridge India Equity Fund, and Abakkus Growth Fund are among the investors that participated in the anchor book.
eMudhra IPO: Subscription Status
eMudhra was subscribed 0.48 times at the end of day one on Friday. The price band of the IPO has been fixed at Rs 243–256 a share and the lot size is 58 shares. Only retail investors have evinced interest, as the portion set aside for them was subscribed 0.94 times. On the other hand, QIBs are yet to bid, while the quota for non-institutional investors got just 0.04 percent.
IIFL Securities Limited, Yes Securities (India) Limited, and Indorient Financial Services Limited are the Book Running Lead Managers and Link Intime India Private Limited is the registrar for the Issue.
eMudhra IPO: GMP Today
eMudhra IPO’s shares are not trading in the grey market today. On Friday, eMudhra IPO’s grey market premium (GMP) stood at minus Rs 5. The company has fixed the price band for the offered shares at Rs 243–256 apiece. So, at the upper end of the price band, eMudhra shares are trading for Rs 251 in the grey market.
eMudhra IPO: Financials
The company’s revenue and profit after tax (PAT) have been ascending for the last three financial years, and it has surpassed previous numbers in the first 9 months of FY22 as well. In FY19, the company’s total revenue stood at Rs 101.6 crore. That went up to Rs 116.8 crore in FY20 and Rs 132.4 crore in FY21. In the first 9 months of FY22, its total revenue stood at Rs 138.3 crore.
Similarly, eMudhra Limited reported PAT at Rs 17.4 crore in FY19, which went up to Rs 18.4 crore in FY20, which further ascended to Rs 25.3 crore in FY21. In the first 9 months of FY22, eMudhra Limited reported a PAT of Rs 30.3 crore. Hence, the financials of the company have remained sound for the last four financial years.
eMudhra IPO: Objective
The eMudhra IPO proceeds from the issue will be used for: repayment in full or in part of all or certain borrowings; working capital requirements; purchase of equipment; and funding of other related costs for data centers proposed to be set up in India and overseas locations.
eMudhra IPO: Should You Subscribe?
Angel One is neutral on the issue. Angel One research report on eMudhra IPO says, "eMudhra has an established position as a licensed CA with a strong network of channel partners and a diverse customer base, and it will be using part of the IPO proceeds to grow in overseas markets as well as improve its data center infrastructure." However, the scale of operation is relatively modest and the digital security and paperless transformation market is highly competitive. At the upper end of the price band, the post-issue FY22 annualized P/E works out to 49.0x, which we believe is factoring the positives. Hence, we recommend a neutral rating on the issue."