eMudhra makes decent debut, stock lists at 6% premium to issue price

The stock listed at Rs 271 on the BSE as against the issue price of Rs 256 per share. The IPO was subscribed 2.72 times.

eMudhra has made a decent stock market debut, as its shares got listed at Rs 271, a 6 per cent premium when compared with the issue price of Rs 256 per share on the BSE on Wednesday. On the National Stock Exchange (NSE), the stock opened at Rs 270 per share.

At 10:03 am; eMudhra traded at Rs 267, 4 per cent higher as against the issue price on the BSE. The stock hit a high of Rs 279 and a low of Rs 263.90 per share on the BSE so far. A combined 2.4 million equity shares changed hands on the BSE and NSE.

The initial public offer (IPO) of eMudhra had received a decent subscription with the issue subscribed at 2.72 times. The qualified institutional buyers (QIBs) category was subscribed 4.05 times. The retail investors category was subscribed 2.61 times and the non-institutional investors category was subscribed 1.28 times.

The company proposes to utilize the net proceeds of the fresh issue towards funding prepayment or repayment in part of all or certain borrowings availed by the company, funding its working capital requirements, purchase of equipment and funding of other related cost for data centers proposed to be set up in India and overseas locations and others.

eMudhra is engaged in the business of providing Digital Trust Services and Enterprise Solutions to individuals and organizations functioning in various industries. It has strong digital signature certificate expertise and is the only Indian company to be directly recognized by renowned browsers and document processing software companies such as Microsoft, Mozilla, Apple, and Adobe, allowing it to sell digital identities to individuals and organizations worldwide and issue SSL/TLS certificates for website authentication.

eMudhra has an established position as licensed Certifying Authorities (CA) with a strong network of channel partners, a diverse customer base and it will be using part of the IPO proceeds to grow in overseas markets as well improve its data center infrastructure. However, the scale of operation is relatively modest and digital security and paperless transformation market is highly competitive, analyst at Angel One said in an IPO note.

With strong market share and robust customer retention ratio (96 per cent & 88 per cent in Digital Services and Enterprise Solutions respectively), we believe the company has first mover advantage and is well poised to encash on growth opportunity from the growing IT/Digitization space. In terms of end-users, Banking, Education and Manufacturing sectors are likely to drive growth for players like eMudhra, SBI Securities had said in a note.