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The ₹413- crore initial public offering of eMudhra opened today. The IPO, which has set a price band of ₹243 to ₹256 per equity share, will close on May 22.

The largest licensed certified authority (CA) in the digital signature certificates market in India intends to garner about ₹413 crore through fresh issue of equity shares aggregating up to ₹161 crore and an offer for sale of 98.35 lakh equity shares aggregating up to ₹252 crore by the shareholders and promoters.

The company is engaged in the business of providing digital trust services and enterprise solutions like individual/organizational certificates, digital signature certificates etc.

The firm on Thursday announced that it has raised ₹124 crore from anchor investors ahead of its initial public offering. Aditya Birla Sun Life Mutual Fund (MF), Motilal Oswal MF, Nippon India MF, SBI MF, Baring Private Equity India, Hornbill Orchid India Fund, Pinebridge India Equity Fund and Abakkus Growth Fund are among the investors that participated in the anchor book.

The company informed that the proceeds from the IPO will be used to repay debt, fund working capital, buy equipment for data centers, investment in eMudhra INC for augmenting its business development, sales, marketing and other related costs to growth.

Brokerages have mixed reviews on the issue due to the current market environment as well as weak LIC listing.

Let's take a look at what the brokerages have to say:

Angel One: Neutral

“The scale of operation is relatively modest and the 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 in the positives. Hence, we recommend a Neutral rating on the issue," said Angel One in a note.

Choice Broking: Subscribe with caution

The brokerage noted that there are no listed peers having business similar to EML. At a higher price band of Rs. 256, the company is demanding a P/E multiple of 114.5x (to its FY21 earnings of Rs. 2.2 per share), which seems to be high, it said. Also considering the current turbulence in the global equity market, it assigned a “Subscribe with Caution" rating for the issue.

Marwadi Financial Services: Subscribe

There are no listed companies in India that are comparable in all aspects of business and services that the company provides, noted the brokerage.

It has assigned a 'subscribe' rating on the issue as the company is the largest licensed certifying authority in India with a market share of 37.9 percent in the digital signature certificates market space and considering the future growth potential of the company.

Reliance Securities: Not rated

eMudhra has strong financials, a leadership position in the digital signature certificates and digital trust services space, a massive network of Indian and global channel partners, a growing customer base and an experienced management team, said the brokerage firm.

"However, the aggressively priced IPO hardly leaves anything meaningful on the table for investors with a medium-term perspective," it added, with no rating on the issue.

Should you subscribe eMudhra IPO? 4 brokerages say this

Brokerages have mixed reviews on the issue due to the current market environment as well as weak LIC listing.

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