eMudhra IPO: GMP, subscription status, financials, review. Should you apply?

Market


eMudhra IPO: The public issue opened for subscription on 20th May 2022 and it will remain open for bidding till 24th May 2022. The company aims to raise 412.79 crore from its public offer out of which 161 crore is aimed through fresh issues while the rest 251.79 crore is expected through offer for sale (OFS) route. The company has fixed price band of the initial public offering (IPO) at 243 to 256 per share. Meanwhile, grey market sentiment in regard to the public issue has also improved after sharp rise in secondary market on Friday session.

eMudhra IPO GMP

According to market observers, eMudhra IPO GMP (grey market premium) today is 13, which is 3 higher from its Friday evening grey market premium of 10. It means, grey market is expecting eMudhra IPO listing at around 269 ( 256 + 13), believe market observers.

eMudhra IPO subscription status

After day 1 of bidding, the public issue has been subscribed 0.48 times whereas its retail portion has been subscribed 0.94 times.

eMudhra IPO financials

Company’s revenue and profit after tax (PAT) has been ascending for the last three financial years and it has surpassed previous numbers in first 9 months of the FY22 as well. In FY19, company’s total revenue stood at 101.6 crore that went up at 116.8 crore in FY20 and 132.4 crore in FY21. In first 9 months of FY22, its total revenue stands at 138.3 crore.

Similarly, eMudhra Limited reported PAT at 17.4 crore in FY19 that went up at 18.4 crore in FY20, which further ascended at 25.3 crore in FY21. In first 9 months of FY22, eMudhra Limited has reported a PAT of 30.3 crore. Hence, financials of the company have remained sound for last four financial years.

eMudhra IPO objectives

The proceeds from the issue will be utilised 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; funding of expenditure relating to product development; investment in eMudhra INC to augment its business development, sales, marketing and other related costs for future growth; and finally on general corporate purposes.

eMudhra IPO review

Giving subscribe tag to eMudhra IPO, Astha Jain, Senior Research Analyst at Hem Securities said, “Company is bringing the issue at price band of 243-256 per share at p/e multiple of 49x on post issue annualized 9Months FY22 eps basis. Company being largest licensed Certifying Authority in India is a one stop shop solution provider in secure digital transformation and is well-positioned to capture the favourable industry dynamics in India and globally. eMudhra being one unique Indian company with presence across all the three segments of Digital Trust Services, Digital Security Solutions and Paperless Transformation Solutions is one of the largest players in the Indian Digital Trust Services market with a market share of 17.8% . Despite being just 12 years in the market, eMudhra has better brand recognition and stronger channel partner relationship. Looking after decent financial performance of company & unique business model, we recommend “Subscribe” on issue.”

However, Angel One is neutral on the public issue. Angel One research report on eMudhra IPO says, “eMudhra has an established position as licensed CA with a strong network of channel partners, a diverse customer base and it will be using part of the IPO proceeds to grow in overseas markets as well improve its data center infrastructure. However, the scale of operation is relatively modest and 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.”

eMudhra IPO other details

eMudhra IPO price band has been fixed at 243 to 256 per share. The public issue is proposed for listing on BSE and NSE and it is likely to hit Dalal Street on 1st June 2022. Finalisation of share allotment is expected on 27th May 2022.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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