The initial public offering (IPO) of digital signature certificate provider eMudhra had opened for public subscription on Friday and and conclude on Tuesday, May 24, 2022. The firm has fixed a price band of ₹243-256 a share for its issue. It has raised ₹124 crore from anchor investors ahead of its issue.
As of 10:45 am on day 2 of the issue, the IPO has been subscribed 0.65 times with retail investors’ category fully booked 1.25x and NIIs 0.07x, BSE data showed.
The company has cut the size of the fresh issue from ₹200 crore to ₹161 crore. Besides, there will be an Offer-For-Sale (OFS) of 98.35 lakh shares by promoters and existing shareholders.
After commanding premium in the last few session, there has been no GMP activity for eMudhra shares in the grey market today. Shares of the company are expected to list on the stock exchanges BSE and NSE on June 1, 2022.
Proceeds from the fresh issue will be utilised to repay debt, support working capital requirements, purchase equipment and pay for other related costs for data centre costs proposed to be set up in India and overseas locations, develop products, investment in eMudhra INC and for general corporate purposes.
“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,” said brokerage Angel One.
eMudhra is the largest licensed certifying authority in India, engaged in the business of providing digital trust services and enterprise solutions to individuals and organisations.
“There are no listed peers having business similar to EML. At higher price band of ₹256, the company is demanding a P/E multiple of 114.5x, which seems to be high. Also, considering the current turbulence in the global equity market, we assign a “Subscribe with Caution” rating for the issue,” said Choice Broking.