eMudra IPO Review and Analysis – Should you buy or not?

eMudra IPO- eMudra Limited, India’s largest licenced Certifying Authority, is planning an initial public offering. The subscription period for this IPO will begin on May 20, 2022. In the last three years and nine months, the company has had strong sales growth. During the same time span, its margins also improved. Should you buy in the eMudra initial public offering? What are the potential risks in this IPO? Is the eMudra IPO pricing too high? Allow me to do an IPO examination and provide a comprehensive analysis.

The company is India’s largest licenced Certifying Authority. In the financial year 2021, it has a market share of 37.9% in the digital signature certificates market (36.5 percent in FY2020).

The company’s business is delivering digital trust services and enterprise solutions to consumers and businesses in a variety of industries. They issue a variety of certificates, including individual and corporate certificates, SSL/TLS certificates, and device certificates, as part of their Digital Trust Services.

eMudra IPO dates, issue details, Size and Price Band

IPO Opening Date 20-May-22
IPO Closing Date 24-May-22
Issue Type Book Built Issue IPO
Face Value Rs 5 per equity share
IPO Price band Rs 243 to Rs 256 per equity share
Lot Size 58 Shares
Listing at BSE and NSE
Total Issue Size Rs. 412.79 Crores
    Fresh issue     Rs. 161 Crores
    OFS     Rs. 251.79 Crores

What are the competitive strengths of eMudra Limited?

1) The company is India’s largest licenced Certifying Authority.

2) The company is a one-stop shop for safe digital transformation solutions and is well-positioned to take advantage of favourable industry dynamics in India and abroad.

3) The company possesses expertise in technical certifications, accreditations, and membership in international organisations.

4) It has a technology-based infrastructure to support service and solution quality and security.

5) It has a large, loyal, and expanding consumer base.

6) Collaborations with major Indian and international channel and enterprise solution partners

7) A knowledgeable promoter, board of directors, and senior management team

What are the Objectives of the eMudra IPO Offer?

The eMudra IPO is worth Rs 412.79 crores and includes both an OFS and a new issue.

1) Offer for Sale (OFS) for Rs 251.79 crores: Under the OFS, selling shareholders would receive the full amount, while the firm would receive nothing.

2) Rs 161 crore fresh issue: The following would be done with a new issue:

-Repayment or prepayment of all or part of a loan, in full or in part.
-Working capital requirements are being funded.
-Purchase of equipment and funding of other related costs for data centres planned in India and other countries.
-Spending on product development that is funded.
-Investment in eMudhra INC to help with business development, sales, marketing, and other costs associated with future expansion.
-General business reasons

Who are the promoters of eMudra Limited?

Venkatraman Srinivasan and Taarav Pte. Limited are the promoters of the company.

How is the company financial track record?

Financial Year ending / Period ending (Amt in Mns)
Particulars FY19 FY20 FY21 Dec-21
Total Assets 1,195 1,587 1,919 2,541
Revenues 1,016.8 1,168.0 1,324.5 1,383.0
Profit After Tax 174.4 184.2 253.6 303.4
Profit % 17.15% 15.77% 19.15% 21.94%

Reasons to Buy eMudra IPO

The following are the main reasons to participate in this initial public offering.

1) The company is India’s largest licenced Certifying Authority.

2) In the last three years and nine months, the company has had strong sales growth.

3) During the same time period, the company achieved good margin growth.

Risk factors in eMudra IPO

1) A company’s capacity to correctly predict market needs and use and manage its research and development is critical to its commercial success.

2) One of the objectives of the offer is to invest in eMudra Inc, a subsidiary formed in the United States, in order to supplement its business development, sales, marketing, and other relevant costs in order to support future growth. The anticipated expenditure is vulnerable to external influences and the impact of such expenditure is unknown.

3) The company’s commercial activities are heavily reliant on technology, and it is a fundamental part of its operations. If their technology platform fails, they may be unable to finish effectively, resulting in fewer revenue, increased costs, and a negative impact.

4) Company security measures may be breached in the future. As a result, its services and solutions may be seen as insecure. Customers may reduce or stop using its solutions, its reputation will be tarnished, and large liabilities will be incurred, all of which would have a negative impact on its profits and growth prospects.

5) They rely on one channel partner for a major chunk of their revenue, and losing that partner can have a negative impact on the business.

6) Before investing in this IPO, investors should read the entire risk factors section of the RHP.

eMudhra IPO RHP

eMudhra IPO Timeline

Event Date
eMudhra IPO Opening Date May 20, 2022
eMudhra IPO Closing Date May 24, 2022
Basis of Allotment May 27, 2022
Initiation of Refunds May 30, 2022
Credit of Shares to Demat May 31, 2022
eMudhra IPO Listing Date Jun 1, 2022

How to buy eMudra IPO online through Zerodha?

You can login to your demat account, visit the IPO section and apply for this IPO during the subscription dates.

You can also apply this IPO on Zerodha. If you do not have Zerodha account, sign-up here and proceed to the next step.

Zerodha customers can apply in this IPO by login into Zerodha Console submitting an IPO application form.

Follow below steps to apply this IPO in Zerodha platform:

1) Visit the Zerodha portal and login to Console.

2) Go to Portfolio and click the IPOs link.

3) Visit ‘eMudra Limited IPO’ row and click the ‘Bid’ button.

4) Enter your UPI ID, Qty and the Price which you want to bid.

5) Click on ‘Submit’ IPO application form.

6) Visit the UPI App (net banking or BHIM) to approve the mandate.

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eMudra IPO – Should you Invest or not?

The largest licenced certifying business in India is eMudra Limited.

In the last three years and nine months, the company has had strong sales growth.

During the same time period, the company saw good margin growth.

However, the eMudra IPO is overpriced.

Because stock markets are currently experiencing corrections, investors should consider if they need to pay a high IPO price in such a gloomy environment. Given all of the aforementioned good and negative characteristics, investors should avoid this IPO at this time. One can consider investing if eMudra Share Price is offered at a discount after listing.

eMudra IPO


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