eMudhra IPO opens for subscription on 20 May 2022 and is scheduled to close on 24 May 2022. As part of a comprehensive eMudhra IPO review, we have compiled the major strengths and risks of the company as well as broker recommendations.
eMudhra is India’s largest licensed Certifying Authority (CA) with a market share of 37.9% in the digital signature certificates market space in FY2021. The comapny provides Digital Trust Services and Enterprise Solutions to individuals and organisations functioning in various industries. As part of its Digital Trust Services, the company issues a range of certificates including individual/organizational certificates, SSL/TLS certificates and device certificates (used in IoT use cases) to build a digital trust backbone.
Having issued more than 50 million digital signature certificates since inception, the company caters to all kind of subscribers who use digital signature certificates for income tax return filing, filings with the Ministry of Corporate Affairs (Registrar of Companies), tenders, foreign trade, banking, railways and many other needs.
eMudhra IPO Review – Strengths
- Largest licensed Certifying Authority in India
- One stop shop solution provider in secure digital transformation and well-positioned to capture the favourable industry dynamics in India and globally
- Technology certifications, accreditations and membership in international bodies
- Technology-backed infrastructure to support quality and security of services and solutions
- Diverse, longstanding and growing customer base
- Partnerships with leading Indian and global channel partners and enterprise solution partners
- Experienced promoter, board of directors and senior management team
eMudhra IPO Analysis – Risk Factors
- Plans to expand operations in geographical areas where it has limited history
- Significant investment (INR152.7 million) in the United States of America through eMudhra Inc
- Highly dependent on technology in carrying out its business activities
- Dependent on top 5 channel partner for a significant portion (24.65% in FY2021) of revenues
- Significant portion of revenues (12.14%) from top 5 customers
eMudhra IPO Analysis – Financial Performance
| FY2019 | FY2020 | FY2021 | 9M FY2022 | |
| Revenue | 101.7 | 116.8 | 132.4 | 138.3 |
| Expenses | 78.1 | 93.8 | 101.3 | 101.6 |
| Net income | 17.2 | 17.0 | 17.1 | 31.4 |
| Margin (%) | 16.9 | 14.6 | 12.9 | 22.7 |
eMudhra Valuations & Margins
| FY2019 | FY2020 | FY2021 | 9M FY2022 | |
| EPS | 2.48 | 2.37 | 2.49 | 4.36 |
| PE ratio | – | – | 97.59 – 102.81 | |
| RONW (%) | 23.05 | 18.07 | 16.26 | 21.79 |
| ROCE (%) | 32.6 | 28.1 | 30.5 | 41.5 |
| EBITDA (%) | 31.81 | 27.73 | 31.00 | 36.41 |
| Net Debt/Equity | 0.26 | 0.31 | 0.23 | 0.22 |
| NAV | – | – | 15.30 | 20.02 |
eMudhra IPO Review – Broker Calls
Angel One – Neutral
Arihant Capital –
Ashika Research –
Asit C Mehta –
BP Wealth – Avoid
Canara Bank Securities – Avoid
Choice Broking –
Elite Wealth –
GEPL Capital –
Hem Securities – Subscribe
ICICIdirect –
Jainam Broking –
KR Choksey –
LKP Securities –
Marwadi Financial Services –
Nirmal Bang –
Reliance Securities –
Religare Broking –
Samco Securities –
Share India Securities –
SMC Global – 2/5
Systematix –
Ventura Securities –
