eMudhra IPO: Checkout financial performance, business outlook, analysts view in 10 points

May 20, 2022

By: Bhakti Makwana

eMudhra launches ₹412 crore IPO

The Digital signature certificate provider has opened its ₹412 crore IPO for subscriptions from today, May 20. It will close on May 20. The price band is set at ₹243 - ₹256 per share.

Credit: eMudhra

What does the company do?

eMudhra is a certifying authority (CA) engaged in the business of providing digital signature certificates in India to individuals and corporations.

Credit: eMudhra

IPO money to be used for debt repayment and to buy equipments

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

Credit: Investopedia

eMudhra’s profitability has been rising consistently in last three years

The firm made a profit of 25 crore in FY21 as compared to ₹17 crore in FY20 along with steady growth in revenue.

Credit: Flourish-chart

The firm has issued more than 50 million digital signature certificates so far

eMudhra caters to all kinds of subscribers who use digital signature certificates for income tax return filing, tenders, foreign trade, banking, railways and many other needs. It has issued more than 50 million digital signature certificates since its inception.

Credit: eMudhra

Market share in digital signature at 37 percent

The company has gained a market share of 37.9 percent in the digital signature certificates market in FY21, which grew 36.5 percent per cent in FY20.

Credit: BCCL

TCS, Infosys, JSW Steel are among its clients

Some of its customers from the corporate sector include Infosys, Tata Consultancy Services, Hindalco Industries, Larsen & Toubro Infotech JSW Steel, Bharti AXA Life Insurance.

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Analysts recommend subscribing to IPO but with caution

Analysts suggest investors subscribe to the IPO on account of decent financial performance and unique business model. However, they advise investors to stay cautious as current turbulence in the global equity market may impact the IPO.

Credit: BCCL

Grey market indicates a negative listing

The grey market believes that the stock might list at a discount – below its lower price band of ₹256, due to weak market conditions.

Credit: BCCL

Current market volatility may impact demand for the IPO

There is a lot of selling pressure in the market by large foreign investors, which has taken a toll on equity markets in the last two months. High inflation, sudden rise in interest rates, and the Russia-Ukraine war impacting the supply of essential commodities are some reasons for the volatility.

Credit: BCCL

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