eMudhra Limited is the largest licensed Certifying Authority ('CA') in Bharat with a market share of 37.9% in the digital signature certificates market space in FY 2021 having grown from 36.5% in FY 2020. They are engaged in the business of providing Digital Trust Services and Enterprise Solutions to individuals and organisations functioning in various industries. As part the Digital Trust Services, they issue 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. Under the Enterprise Solutions vertical, they offer a diverse portfolio of Digital Security and Paperless Transformation Solutions, complementing the Digital Trust Services business, to customers engaged in different industries, thereby making the Company a 'one stop shop' player in secure digital transformation to provide a wide spectrum of services and solutions from issuance of certificates as a certifying authority to offering identity, authentication and signing solutions. With more than 50 million digital signature certificates issued 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. The Company works closely with large government and banking customers like the 20+ public and private sector banks and state governments. The Company has a 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 individual/organization and issue SSL/TLS certificates for website authentication globally. As of December 31, 2021, they have 91,259 channel partners for Digital Trust Services spread across various States and Union Territories in Bharat and out of the 539 system integrator partners, 267 are present in India and 272 are present internationally in United States of America, Europe, Middle East and Africa and Asia Pacific. The retail customers grew from 58,872 as of March 31, 2019 to 115,905 as of March 31, 2021. Further, the enterprise customers grew from 249 as of March 31, 2019 to 518 as of March 31, 2021. As per financial performance, eMudhra has posted total income/net profits of Rs 101.68 Cr / Rs 17.23 Cr (FY19), Rs 116.80 Cr / Rs 17.05 Cr (FY20), Rs. 132.45 Cr / Rs 17.13 Cr (FY21) and Rs. 138.30 Cr / Rs 31.42 Cr (9M FY22). So company has posted good results over last couple of years and shown exceptional growth in 9M FY22. Company has posted an average EPS of Rs. 2.45 and average RoNW of 18% for last three fiscals. Issue is priced at a P/BV of 12.79 as per NAV of 20.02 on 31.12.21. If we attribute latest earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 117 and as per FY22 annualised earnings P/E is around 48, which looks over priced. As per RHP, there are no listed peers. On BRLM's front, 3 lead managers are associated with this IPO, and have handled around 31 IPOs in last three fiscals.IIFL Securities Limited: This is 27th IPO from this BRLM. From last 10 IPOs, 5 opened below issue price and remaining are opened above issue on the day of listing. As of now, 7 are trading below issue price and other are trading above issue price. ( As on 13.05.22)YES Securities (India) Limited: This is 5th IPO from this BRLM. From last 4 IPOs, 2 opened below issue price and remaining are opened above issue on the day of listing. As of now, 2 are trading below issue price and other are trading above issue price. ( As on 13.05.22)Indorient Financial Services Limited: This is 2nd IPO from this BRLM. The last IPO opened below issue price and now trading above issue price. ( As on 13.05.22) As per financials, eMudhra Limited has shown good growth, RoNW is 16.26% and P/E is respectively 117 and 48 as per FY21 and annualised FY22 earnings, which looks over priced. Company is in Digital Signature market and has good market share. As paperless processes are increasing, so there is good growth opportunities in this sector. Performance of BRLM is poor. So, we give NEUTRAL rating for this IPO and one may apply for long term.
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