On Friday, May 20, eMudhra Limited launched its ₹412.79 crore Initial Public Offering (IPO).
eMudhra IPO: Here's all you need to know about its Financials, business outlook
TL;DR.
eMudhra has a presence across all the 3 segments of Digital Trust Services, Digital Security Solutions, and Paperless Transformation Solutions. Since Inception it issued more than 50 million digital signature certificates.
The company is selling its shares in the range of ₹243-256 apiece.
The company aims to raise ₹161 crore via the issuance of fresh equity shares, whereas existing shareholders and promoters will offload 9,835,394 shares aggregating to ₹251.79 crore.
The quota for retail investors in eMudhra IPO has been fixed at 35 per cent of the net offer. QIB quota is fixed at 50 per cent while the quota for NII is reserved at 15 per cent.
Earlier, on Thursday, the company raised ₹124 crore from anchor investors. The company has allocated 48,37,336 equity shares to anchor investors at ₹256 per share, aggregating the transaction size to ₹123.83 crore, as per the company's filing on the BSE.
Meanwhile, the eMudhra IPO was subscribed 0.44 times on May 20, 2022, at 4:18:00 PM. The public issue was subscribed to 0.85 times in the retail category, 0.00 times in the QIB category, and 0.04 times in the NII category.
Company Overview
eMudhra Limited ("eMudhra") was incorporated on June 16, 2008, as a wholly-owned subsidiary of 3i Infotech Limited. (In the year 2013, 3i Infotech launched e Mudhra.) eMudhra is the largest licenced Certifying Authority ("Certifying Authority" or "CA") 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.
It has a presence across all the 3 segments of Digital Trust Services, Digital Security Solutions, and Paperless Transformation Solutions.
With more than 50 million digital signature certificates issued since inception, eMudhra caters to all kinds of subscribers who use digital signature certificates for income tax return filing, filings with the Ministry of Corporate Affairs (Registrar of Companies), tenders, foreign trade, banking, railways and many other needs.
The company provides its solutions and services in overseas regions such as the Americas, Europe, the Middle East, Africa and the Asia Pacific.
Venkatraman Srinivasan is the Promoter and Executive Chairman of the company and has been the Director of the company since its incorporation. He has over 34 years of experience in the information technology industry and has served as the managing director and chief executive officer of ICICI Infotech Limited.
Product Portfolio
The company is engaged in the business of providing Digital Trust Services and Enterprise Solutions to individuals and organisations functioning in various industries.
Digital Trust Services: The company provides Digital Trust Services in the capacity of a Certifying Authority in India and internationally, through a Web trust accreditation. Their digital signature certificates provide cryptographic digital identities to individuals, organizations, websites and devices controlled over the internet (IoT) and ensure the authenticity of transactions emanating from the above-said entities through cryptographic validation.
Certificates include individual and organisational certificates, SSL/TLS certificates, and device certificates.
Enterprise Solutions: Under this vertical, eMudhra offers a diverse portfolio of Digital Security and Paperless Transformation Solutions, complementing their Digital Trust Services business, to customers engaged in different industries, thereby making eMudhra a "one-stop-shop" player in secure digital transformation.
Competitive Strengths
The company has been identified and ranked amongst the ‘20 Most Promising Tech Solution Providers for Government & Public Sector 2019’ by CIO Review India.
eMudhra is the only Indian company to be admitted as a member of the European Cloud Signature Consortium as well as the Certifying Authority/Browser Forum, a global forum that governs the use of SSL/TLS certificates, and to be accredited by Web trust, which makes their digital signature certificates directly recognised by browsers across the world, allowing them to issue digital signature certificates in many countries.
emudhra Enterprise Solutions are used by top 10 banks, 6 of the top 10 automotive companies, and 19 out of the top 20 companies amongst the top 500 ranked companies in India by the Economic Times in Financial Year 2020 as of December 31, 2021.
The company has strong digital signature certificate expertise and is the only Indian company to be directly recognised by renowned browsers and document processing software companies such as Microsoft, Mozilla, Apple, and Adobe, allowing it to sell digital identities to individuals and organisations worldwide and issue SSL/TLS certificates for website authentication.
Further, as of December 31, 2021, eMudhra has 91,259 channel partners for Digital Trust Services spread across various states and Union Territories in India and out of their 539 system integrator partners, 267 are present in India and 272 are present internationally in the United States of America, Europe, Middle East, and Africa, and the Asia Pacific.
Company retail customers grew from 58,872 as of March 31, 2019, to 115, 905 as of March 31, 2021. Further, their enterprise customers grew from 249 as of March 31, 2019, to 518 as of March 31, 2021.
Objective of Issue
The net proceeds of the Fresh Issue are proposed to be utilised as:
| Objects | Amount ( ₹in Cr) |
| Repayment or pre-payment, in full or in part, of all or certain borrowings availed by the company | 35.00 |
| Funding working capital requirements of the company | 40.22 |
| Purchase of equipments and funding of other related costs for data centers proposed to be setup in India and overseas locations | 46.36 |
| Funding of expenditure relating to product development | 15.03 |
| Investment in eMudhra INC for augmenting its business development, sales, marketing and other related costs for future growth | 15.27 |
| General Corporate Purposes | * |
| Total | * |
| Source: RHP |
IPO Snapshot
| IPO Details | |
| Price Band (Rs./Share) | ₹243-256 |
| Opening date of the issue | 20th May 2022 |
| Closing Date of the issue | 24th May 2022 |
| Issue Size | Shares of ₹5 (aggregating up to ₹412.79 Cr) |
| Fresh Issue | Shares of ₹5 (aggregating up to ₹161.00 Cr) |
| Offer For Sale | 9,835,394 shares of ₹5 (aggregating up to ₹251.79 Cr) |
| Face Value (Rs/ share) | 5 |
| Bid Lot | 58 |
Financials
The company reported a profit of ₹30.34 crore in the nine-month period ended December 2021, with a total revenue during the same period reported at ₹138.30 crore. Its revenue increased to ₹132.45 crore from ₹116.8 crore during the period under review.
| Financials ( ₹in Cr) | Dec-2021 | Mar - 2021 | Mar -2020 | Mar 2019 |
| Revenue from operations | 137.24 | 131.59 | 116.45 | 101.58 |
| Other income | 1.06 | 0.86 | 0.34 | 0.096 |
| Total revenue | 138.30 | 132.45 | 116.79 | 101.68 |
| Total expenses | 101.56 | 101.27 | 93.7.8 | 78.13 |
| PBT | 36.74 | 31,18 | 23.01 | 23.54 |
| Profit after tax | 30.34 | 25.35 | 18.41 | 17.43 |
| EPS (Basic) (Rs) | 4.36 | 2.49 | 2.37 | 2.48 |
| EPS Diluted (Rs) | 4.36 | 2.49 | 2.37 | 2.48 |
| Source: RHP |
The revenue contribution of the digital products offered under their Enterprise Solution vertical has consistently grown from Rs. 36.18 crore in the Financial Year 2019 to Rs. 64.34 crore in the Financial Year 2021.
Key Risks
eMudhra relies heavily on technology to run its operations and considers it a vital part of the company. Because the company's core business is providing IT security solutions to clients, any technology-related failure might be disastrous for the end customer.
We explain here how to find a good IPO to invest in
First Published: 21 May 2022, 08:58 AM IST
