Emudhra Ipo Subscribes By 96% On Day 2. Should Investors Subscribe On Last Day


eMudhra’s 412.79 crore initial public offering was slightly shy of a full subscription on the second day. The IPO subscribed by 96% mainly driven by retail investors. Demand from HNIs and institutional investors remained dull even on Monday.

As per NSE data, the IPO received cumulative bids of 1,09,00,752 equity shares compared to the offered size of 1,13,64,784 equity shares – subscribing by 96%.

On Day 2, the portion kept for retail investors oversubscribed by 1.69 times. However, the portion allocated to Qualified Institutional Buyers(QIBs) and Non-Institutional Investors only subscribed by 25% and 16% respectively.

Under the IPO, 50% of the portion is reserved for qualified institutional buyers, while 15% is kept for non-institutional investors, and 35% is allocated to retail individual investors.

The IPO opened on May 20 and will be available for subscription till May 24. The IPO comprises fresh issues worth 161 crore and an offer for sale up (OFS) to 9,835,394 equity shares. A price band of RS 243-256 per equity share has been set with a face value of 5 each.

eMudhra plans to utilise the proceeds from the issue 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.

Post the IPO, eMudhra will list on BSE and NSE.

In its IPO note, Ventura said, over the period of FY21-24E, we are expecting revenue/ EBITDA/ PAT to grow at a CAGR of 27.9%/ 25.8%/ 23% to 275 crore / Rs105 crore/ 71 crore, respectively, while EBITDA and net margins to decline by 190bps (to 38.2%) and 25.9bps (to 320%), respectively. Subsequently, return ratio RoE is expected to decline by 1670bps (to

16.2%) & RoIC to improve by 1250bps (to 43%) respectively by FY24.

“With strong potential for revenue growth and scope for further improvement in profitability, we would recommend SUBSCRIBE rating for a target price of 392 (27.4X FY24 PE) for long-term gains,” Ventura said in its note.

Established in 2008, eMudhra is the largest licensed Certifying Authority in the digital signature certificate market space in India with a market share of 37.9% in FY21. It provides digital trust services and enterprise solutions to individuals and organisations functioning in various industries.


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