eMudhra IPO subscribed 65% on day 2; retail book navigates through

New Delhi: The initial public offering (IPO) of Rs 412.79 crore from eMudhra, India’s largest licensed certificate authority, received a mixed response during the second day of the bookbuilding process Monday.

The issue, which opened for subscription on Friday May 20, will close at auction on Tuesday May 24. The company is selling its shares in a lot of 58 shares in a price range of Rs 243-256.

According to BSE data, investors made bids for 74,18,490 shares or 65% from the 1,13,64,784 shares offered for subscription at 10:55 a.m. Monday.

The quota for retail bidders was subscribed 1.25 times, while the allocation for non-institutional bidders was only 7% subscribed. Qualified institutional buyers have so far not participated in the order book building process.

The company has reserved 50% of the net supply for qualified institutional buyers (QIB), while non-institutional buyers (NII) will get a 15% allocation. The remaining 35% of shares will be allocated to retail bidders.

The company reported a profit of Rs 25.36 crore in the 2020-21 financial year, compared to a net loss of Rs 18.41 crore in the previous year. Its income rose from Rs 116.8 crore to Rs 132.45 crore during the reporting period.

It recorded a profit of Rs 30.34 crore in the nine-month period ending December 2021, with total revenue in the same period reported at Rs 138.30 crore.

Brokerage houses have a mixed opinion on the matter. The majority believe the company holds the number one position in the growing digital segment, while others say valuations are fully priced, leaving no room for further upside.

brokerage firm

Broking, which has a “neutral” rating to issue, said eMudhra has strong brand recognition, a decent market share in digital services in India and a healthy relationship with channel partners.

It plans to innovate in products, expand into international markets as well as expand customer base, which will drive future growth, he said. On the valuation front, at an upper price range of Rs 256, the company is trading at a PE of 44x FY22 annualized EPS basis, he added.

“The company is the largest accredited certificate authority in India and a one-stop solution provider in secure digital transformation. It is well placed to capture the favorable dynamics of the sector in India and globally,” said Hem Securities.

“It is one of the biggest players in the Indian digital trust services market with a market share of 17.8%. Although only 12 years in the market, eMudhra has better recognition of the brand and a stronger channel partner relationship,” he added with a follow. note to the question.

eMudhra has allocated 48,37,336 shares to lead investors at Rs 256 per share, aggregating the deal size to Rs 123.83 crore, according to a circular uploaded on the BSE website.

IIFL Securities, Yes Securities and Indorient Financial Services are the lead managers of the issue, while Link Intime India is the registrar of the issue.

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