eMudhra IPO plans to raise Rs 412.79 crore initi from its al public offering. The IPO is a combination of fresh issue and OFS portion. eMudhra IPO opened for subscription on Friday, May 20 an will close for bidding on Tuesday, May 24. The company is selling its shares in a lot size of 58 equity shares in a price range of Rs 243-256. eMudhra is the largest licensed Certifying Authority (“CA”) in the country.

Issue Dates20th May – 24th May 2022 
Issue DetailsFresh Issue  Equity Shares upto ₹ 200 Cr
 + Offer for Sale of 1,108,037 Equity Shares
Issue Size  (₹ Cr)Rs. 400 – 412.8cr
Issue Size  (Shares)16,460,908 – 16,124,456  
Face Value₹ 5
₹ 468 – 472 Cr
Bid Lot58 shares 
Price BandRs. 243 – 256 per share 
Issue Structure : 
QIB50% of the offer 
NIB15% of the offer 
Retail35% of the offer (5643560 Shares,  ₹165.3 Cr)
Appl. for 1x Retail0.97 Lacs

About eMudhra

  • eMudhra Limited (“eMudhra”) was incorporated in 2008 as a wholly owned subsidiary of 3i Infotech Limited.
  • eMudhra is the largest licensed Certifying Authority in India with a market share of 37.9% in the digital signature certificates market space in Financial Year 2021 having grown from 36.5% in Financial Year 2020.
  • eMudhra has presence across all the 3 segments of Digital Trust Services, Digital Security Solutions and Paperless Transformation Solutions.
  • Company pas part of their Digital Trust Services, eMudhra issues a range of certificate including individual/ organizational certificates, SSL/TLS certificates and device certificates (used in IoT use cases) to build a digital trust backbone.
  • eMudhra works closely with large government, Railways and banking customers in more than 20 Public and private sector banks and state governments.
  • It is the Only Indian company to be admitted as a member of European Cloud Signature Consortium as well as Certifying Authority / Browser Forum, a global forum that governs the use of SSL/TLS certificates.
  • Accredited to WebTrust ( it is the only Indian company) which makes its digital signature certificates directly recognized by browsers across the world

Anchor Book: eMudhra IPO

eMudhra garnered ₹123.83 crore from anchor investors from nine anchor investors — 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 and Abakkus Growth.

Salient Points

  • Promoter & promoter group will hold 62.81% post the IPO.
  • Of the fresh issue net proceeds, Rs. 46.4cr is to be used for setting-up data centers; Rs. 40.2cr will be utilized to fund the working capital; Rs. 35cr will be used for the repayment/prepayment of the borrowings; Rs. 15.3cr to be used for augmenting business development in the US and another Rs. 15cr to be used for product development.
  • The company derives operates broadly on areas of Digital Trust Services and Enterprise Solutions.
  • In Digital Trust Services it has a 38% market share in Indian digital signature certificates (DSC); sticky business, with annual validity period.
  • In Enterprise Solutions: it has 626 channel partners in India and overseas,

eMudhra IPO: Financials

Particulars / (₹ In Cr)2021(09)FY21FY20FY19
Revenue 137.24131.59116.45101.58
Revenue Growth (%) – 13.00%14.64%– 
EBITDA  50.3640.7932.2932.31
EBITDA Margin (%) 36.41%31.00%27.73%31.81%
Profit for the period 30.3425.3618.4217.44
Net Profit Margin (%) 22.11%19.27%15.82%17.17%
RoNW (%)  21.79%16.26%18.07%23.05%
Net Asset Value (₹ ) 20.0215.313.1310.78
Share Capital 35.0935.0935.0935.09
EPS – Basic & Diluted (₹ )  4.362.492.372.48
Post IPO Equity in cr39
IPO Price256
EPS ( FY21)3.25
PE FY2178.74
EPS  annaulized (9m FY22)5.19
PE FY22 ann49.36
Market Cap1997
Market Cap / Sales 11.38

eMudhra IPO: Assessment

  • eMudhra has strong brand recognition, decent market share in digital services in India and healthy relationship with channel partners.
  • Company is at a good position in growing digital segment. it is one of the largest players in the Indian Digital Trust Services market with a market share of 17.8 per cent. This has been achieved in its existence of just 12 years in the market.
  • eMudhra has better brand recognition and stronger channel partner relationship.
  • The company evenly derives it revenues from areas of Digital Trust Services and Enterprise Solutions which have almost an equal share of revenue. .
  • Digital Trust Services is a sticky business, with annual validity period.
  • In Enterprise Solutions it has shown good traction. The revenue contribution of the digital products offered under its enterprise solution vertical has consistently grown from Rs 36.18 crore in FY 2019 to Rs 64.34 crore in the FY2021 and further to Rs. 71 cr in 9MFY22. i.e. 38% revenue CAGR.
  • Company’s enterprise solutions are used by 10 out of top 10 banks, 6 of top 10 automotive companies and 19 out of top 20 companies amongst the top 500 ranked companies in India by Economic Times in FY20.
  • The company reported a profit of Rs 25.36 crore in the financial year 2020-21, against a net loss of Rs 18.41 crore in the previous year. Its revenue increased to Rs 132.45 crore from Rs 116.8 crore in this period. Further It clocked a profit of Rs 30.34 crore in 9mFY22 on a revenue of of Rs 138.30 crore.
  • The company is being offered at at PE of 44x basis FY22 annualized EPS. It may have worked very well in the bull phase of markets but valuations at this state of market look at the higher end. Thus issue is fully priced, leaving little headroom for further upside based on historical performance.
  • eMudhra in an pre-IPO placement allotted 16,03,617 equity shares for a cash price of Rs 243.2 per equity share aggregating Rs 39.0 crore to Baring Private Equity India AIF, 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.
  • There are no listed peers for the company. The company is positioned uniquely. for a very rough idea some other companies with unique business like Route mobiles and Tanla Platforms Ltd which are cloud communications providers and thus different business than eMudhra are currently quoting at a PE of 30 & 48 respectively. Emudhra is a 200 crore company whereas Route mobiles is a 2000 crore plus revenue company.
  • Expansion in USA seems to be kicking in considerable operating leverage.
  • There are some bright spots in the eMudhra IPO as it is uniquely positioned in Digital Trust, Security and Paperless Transformation Solutions and it could deliver a reasonable to good performance in medium term. I may apply in very moderate quantity on Day 3 only if the issue gathers good traction from QIB investors.
  • Investors need to keep in mind the current meltdown in many IPOs.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.



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