ECOS Mobility shares jump over 17% on market debut

Shares of chauffeur-driven mobility provider ECOS (India) Mobility & Hospitality Ltd were listed with a premium of over 17 % against the issue price of Rs 334 on Wednesday. The stock made its debut at Rs 391.30, a jump of 17.15 % from the issue price on the BSE. Later, it zoomed around 36.52 % to Rs 456. The Rs 601 crore share sale was entirely an Offer For Sale (OFS) of up to 1,80,00,000 equity shares.

At the NSE, shares of the firm listed at Rs 390, a premium of 16.76 %. The company's market valuation stood at Rs 2,646.30. The shares closed the day at Rs 441.05 on NSE, up by 13.09%.

The initial share sale of Ecos (India) Mobility & Hospitality got subscribed 64.18 times on the closing day of bidding on Friday. Per reports, the profit per lot in this IPO is Rs 2,464

The IPO had a price range of Rs 318-334 a share. The Delhi-based company has been providing Chauffeured Car Rentals (CCR) and Employee Transportation Services (ETS) to corporate customers for more than 25 years.

It operates a fleet of more than 9,000 vehicles from economy to luxury cars, across 109 Indian cities. It also provides speciality vehicles like luggage vans, limousines, vintage cars and vehicles for accessible transportation for people with disabilities.

Shivani Nyati, Head of Wealth, Swastika Investmart Ltd noted that ECOS Mobility & Hospitality made a promising stock market debut, which was fueled by the strong investor interest in the IPO's 64.18 times subscription and a substantial grey market premium.

"While the listing was encouraging, investors should remain cautious due to the company's mixed financial performance. Despite top-line growth, profitability has declined, indicating potential challenges in managing costs and maximizing returns. The IPO's valuation appeared higher, based on the P/E ratio, which might have contributed to the relatively modest listing gain compared to the pre-listing hype. Additionally, the company's status as a complete offer for sale means it won't receive any new funds from the IPO, potentially limiting its ability to accelerate growth or address challenges", she continued.

"Those who want to hold it may keep a stop loss at around 350", said Nyati.

The road transport sector, under which the company operates, is set to have a GDP of around $184.7 billion by FY2030, rising at a CAGR of 8.2% in the FY2022 to FY2030 period.

Naturally, this burgeoning sector will work in favor of the corporate mobility and shared mobility segments, also as employment generation within the Indian tertiary sector remains robust in the medium and long-term. Rising infrastructure construction, be it for public transportation works of intercity metros or national highways, and the resultant traffic snarls will see consumers increasingly opt for shared mobility, especially within Indian metros and Tier 2 cities, a segment that the company has been in operating in for the last 25 years.