Since the Covid-19 outbreak in the year 2020, the world has shifted to a virtual mode of operations. From classes to office meetings, covid has changed the way we used to work. One such thing is the authentication of legal papers and documents. With the introduction of the IT Act in the year 2000, the foundation for digital signatures usage was already led.
The combination of signatures and the internet to attest or authenticate any kind of legal document was proposed to be followed in the future. And for the said purpose, various government authorities were set up to facilitate the issuance and the process of authentication under their controls. One such certifying authority is eMudhra.
eMudhra is a certifying authority that primarily deals with the issuance, authentications, and application of Digital Signature Certificates. Established in the year 2008, this digital trust and enterprise solution providing company has issued a total of about 50 million Digital Signatures. Currently having a market share of about 37.9 % in FY 21, the company has become the largest certifying authority in India. With this, the company has now decided to launch its Initial Public Offering to capture a more significant and larger market share.
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eMudhra IPO Details
The company management, in November 2021, decided to launch the eMudhra IPO in the next financial year 2022-23. The tentative month of eMudhra IPO, as per reports, is said to be March 2022. The following table gives the details of the eMudhra IPO at a glance:
eMudhra IPO Timetable
|IPO Opening Date||May 20, 2022|
|IPO Closing Date||May 24, 2022|
|Issue Type||Fresh Issue and Offer for Sale|
|Issue Size (fresh Issue)||₹ 200 Cr|
|Issue Size (offer for sale)||85,10,638 Equity Shares|
|Pre-IPO Placement||₹ 39 Cr|
|Face Value||₹ 5 per Equity Share|
|Price Band||₹- to ₹- per Equity Share|
|Listing Exchanges||BSE and NSE|
As per the DRHP filed by eMudhra with SEBI, the IPO is said to include both a fresh issue and an offer for sale. The fresh issue will comprise equity shares amounting to ₹ 200 Cr (each having a face value of ₹ 5) and the offer for sale will include 85,10,638 equity shares that are to be offloaded by the existing shareholders. Before the IPO, eMudhra also proposes to conduct a pre-IPO placement of equity shares worth ₹ 39 Cr.
The company has decided to allocate a total of 50% of the eMudhra IPO for the Qualified Institutional Buyers (QIB). Apart from this, about 15% will be allocated for the Non-Institutional Investors (NII) and the remaining 35% will be allocated for the Retail Investors.
Objects of Issue
The DRHP of eMudhra states the following objectives to be fulfilled from the proceeds of the IPO:
- ₹ 35 Cr will be used to pay the borrowings availed by the company, in part or in full.
- ₹ 40 Cr will be used towards the funding of the working capital requirements of the company.
- ₹ 46 Cr to be used in the purchase of equipment for the establishment of various data centers in India and abroad.
- ₹ 15 Cr to be used to fund the procedures and requirements of product development.
- ₹ 15 Cr to be used towards the augmentation of various operations like marketing, operations, and sales of eMudhra Inc.
- Lastly, the remaining proceeds for general corporate purposes relating to the IPO and other tasks thereof.
Fundamentals of the company
The reports and financial statements of the company revealed that the total revenue increased from ₹1,167 Cr in FY20 to ₹ 1,324 Cr in FY 21 marking an increase of about 13.5%. Along the same lines, the profit after tax has also shown a rise of about 37.5% with the profit being ₹184 Cr in FY20 and ₹ 253 Cr in FY21.
Promoters and their Shareholdings
The company has a total of 2 individual promoters namely, Ventakraman Srinivasan (43.33%) and Taarav Pte Limited (26.16%). In addition to this, the promoters group include Kaushik Srinivasan and Arvind Srinivasan hold 2.05% and 9.46% stake in the company respectively. All the mentioned promoters and promoters’ groups will be offloading the complete stake they hold in the company.
eMudhra IPO Registrar and Lead Managers
The first page of the DRHP says that the Registrar of the eMudhra IPO will be Link Intime India Private Limited.
Link Intime India Private Limited
C-101, 1st Floor, 247 Park L.B.S Marg,
Vikhroli West Mumbai 400 083 Maharashtra, India
Tel: +91 (22) 4918 6200
The Lead Managers of the eMudhra IPO are mentioned below:
IIFL Securities Limited
10th Floor, IIFL Centre,
Kamala City Senapati Bapat Marg
Lower Parel (W) Mumbai 400013 Maharashtra, India.
Telephone: +91 (22) 4646 4600
YES Securities (India) Limited
2nd Floor, YES Bank House, Off Western Express Highway,
Santacruz East, Mumbai 400 055 Maharashtra, India.
Telephone: +91 (22) 5091 9650
Indorient Financial Services Limited
Rustomjee Central Park, A-Wing, 304/5,
Executive Spaces, Andheri Kurla Road, Chakala,
Mumbai – 400093 Maharashtra, India
Tel: +91 93265 93695
Lastly, we would only like to say that the eMudhra IPO is one of its kind in the market and people are going to look forward to it. With the largest market share and such positive financials and a diversified portfolio of objectives to be achieved from the IPO, it can be a good bet if the price is set keeping in mind the new retail investors. A diversified portfolio of objectives would help the company divide the proceeds in various upcoming projects and repayment of debt thereby increasing the profits and the shareholder’s wealth. We recommend keeping a watch on the price and opening dates of the IPO. Until then, Happy Investing!