The Initial Public Offering (IPO) of Bengaluru-based eMudhra Limited ("Company"), the largest licensed Certifying Authority ("Certifying Authority" or "CA") in India with a market share of 37.9% in the digital signature certificates market space in FY 2021, received bids of 55,06,172 shares against the offered 1,13,64,784 equity shares, at a price band of ₹243-256, according to the data available on the stock exchanges. Overall the issue was subscribed 0.48 times on the first day of bidding.
Retail investors portion was subscribed with 0.94 times. The reserved portion of non-institutional investors witnessed a subscription of 0.04 times. Qualified institutional investors are yet to submit their bids. The issue kicked off for subscription on Friday, May 20 and will be open till Tuesday, May 24.
In a pre IPO placement of 1,603,617 equity shares, the company allotted shares to Baring Private Equity India AIF 2, Acacia Banyan Partners, Motilal Oswal Equity Opportunities Fund Series III, Negen Capital Services Private Limited, Value Wise Consultancy Private Limited, Jagadeesan Kumar, and Krishna Kumar which invested Rs 39 crore at Rs 243.20 per share.
On Thursday, eMudhra Limited raised Rs 123.83 crore from anchor investors i.e Aditya Birla Sun Life Digital India Fund, Aditya Birla Sun Life Small Cap Fund, Motilal Oswal Dynamic Fund, Nippon India Small Cap Fund, SBI Technology Opportunities Fund, Baring Private Equity India, Hornbill Orchid India Fund, Pinebridge India Equity Fund, Abakkus Growth Fund, who were allotted 48,37,336 equity shares at the upper price band of Rs 256 per share.
Brokerage houses like Choice Equity, Jainam Broking, Hem Securities, and SBICAP Securities have given recommended "Subscribe" rating to the issue.
According to Brokerages, the company has a first-mover advantage and is well poised to encash on growth opportunities from the growing IT/Digitization space. With a strong market share and a strong customer retention ratio (96% and 88% in Digital Services and Enterprise Solutions, respectively), the company is India's largest certifying authority, with no listed peers in a business similar to EML's. It has enterprise solution partnerships with both Indian and international channel partners. Annualizing the 9M FY22 performance, the P/E multiple comes out to be 49x.
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 to the Issue.
eMudhra is engaged in the business of providing Digital Trust Services and Enterprise Solutions to individuals and organisations functioning in various industries.
Since inception it has issued over 50 million digital signature certificates for 1.43 Lakh retail customers and as of December 31, 2021, it had 91,259 channel partners for Digital Trust Services spread across various States and Union Territories in India, and out of its 539 system integrator partners, 267 were present in India and balance present internationally across United States of America, Europe, Middle East and Africa and Asia Pacific, where it provides its solutions and services.