eMudhra Limited IPO Review: eMudhra Limited is coming up with its Initial Public Offering. The IPO will open for subscription on May 20th, 2022, and close on May 24th, 2022. It is looking to raise Rs 412.79 Crores out of which Rs 161 Cr will be a fresh issue and the rest Rs 251.79 Cr will be an offer for sale.

In this article, we will look at the eMudhra Limited IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out! 

About eMudhra Limited

The company is engaged in the business of providing Digital Trust Services and Enterprise Solutions to individuals and organisations functioning in various industries. Apart from that, the company issues a range of certificates including individual/organizational certificates, SSL/TLS certificates and device certificates (used in IoT use cases).

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eMudhra Limited - Total Assets

eMudhra is the largest licensed 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. 

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The company has issued over 50 million digital signature certificates through the network of 88,457 channel partners spread across India. As of September 30, 2021, the company is serving 36,233 retail customers and 563 enterprises.

eMudhra Limited - PAT

As of September 30, 2021, eMudhra’s Enterprise Solutions are used by the top 10 banks, 6 top automotive companies and 19 top companies amongst the top 500 ranked companies in India by Economic Times in Financial Year 2020.

Industry Overview

The Indian Digital Trust Services market is currently valued at INR. 3777.3 Million in FY21 at the OEM level. From FY 2016 to FY 2021, the market has grown at a CAGR of 15.9%. Further, it is expected to grow at a CAGR of 17.1% in the next 5 years. 

eMudhra Limited IPO Review - Industry overview

Frost & Sullivan estimates the Digital Signature Certificates market in India to be valued at INR. 1774.5 Million by the end of FY 2021 at the OEM level. The market is estimated to grow at a CAGR of 19.4% till FY 2026.

The Indian IoT device certificates market is estimated to be around INR. 70.0 Mn. by the end of FY 2021 and expected to grow at a CAGR of 29.7% in the next 5 years.

Strengths of eMudhra Limited

  • It is the largest licensed Certifying Authority in India with a market share of 37.9% in the digital signature certificate market space in FY21
  • The company is a one-stop-shop solution provider in secure digital transformation and are well-positioned to capture the favourable industry dynamics in India and globally 
  • It is the only Indian company to be admitted as a member of the European Cloud Signature Consortium as well as Certifying Authority / Browser Forum eMudhra has a renowned customer base such as Microsoft, Mozilla, Apple, and Adobe.
  • They have a vast and extensive network of channel partners or enterprise solution partners

Weaknesses of eMudhra Limited

  • The company operates in a technology-intensive industry. Any change in the standards and regulations will have a negative impact on the business.
  • The technology that they are using is emerging. The success of the business will largely depend on the acceptance and adoption of its solution.
  • They are heavily dependent on one channel partner- Bluesky Infotech for a significant portion of their revenues. Any changes could adversely affect their operations.
  • The company is looking to expand internationally. This could expose them to complex management, legal, tax and economic risks.
  • The nature of the business is seasonal. Some of the solutions such as filing of income tax returns, annual, quarterly and half yearly filings under the Companies Act, etc. are less frequently used.

eMudhra Limited Key IPO Information 

Promoters: Venkatraman Srinivasan And Taarav Pte. Limited

Book Running Lead Managers: IIFL Securities Limited, YES Securities (India) Limited and Indorient Financial Services Limited 

Registrar To The Offer: Link Intime India Private Limited

IPO Size₹412.79 Cr
Fresh Issue₹161.00 Cr
Offer for Sale (OFS)₹251.79 Cr
Opening dateMay 20, 2022
Closing dateMay 24, 2022
Face Value₹5 per share
Price Band₹243 to ₹256 per share
Lot Size58 Shares
Minimum Lot Size1 (58 shares)
Maximum Lot Size13 (754 shares)
Listing DateJune 1, 2022

The Objective of the Issue

The Net Proceeds from the Fresh Issue are proposed to be utilised for: 

  • Repayment or prepayment, in full or in part, of all or certain borrowings.
  • Funding working capital requirements.
  • Purchase of equipment and funding of other related costs for data centres proposed to be set up in India and overseas locations.
  • Funding of expenditure relating to product development.
  • Investment in eMudhra INC for augmenting its business development, sales, marketing and other related costs for future growth.
  • General corporate purposes.

In Closing

In this article, we looked at the details of eMudhra Limited IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for the investors to look into the company’ and analyse its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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