eMudhra lists at a 6% premium but analysts ask investors to hold on it

• Shares of eMudhra listed at ₹271 while the price band was fixed at ₹243 - ₹256 per share.
• The IPO witnessed decent demand from investors as its IPO was subscribed for 2.72 times the number of shares offered.
• The market capitalisation of the company stood at ₹2,115 crore.
  

Buoyed by rising stock markets today, eMudhra listed on the Indian exchanges at a 6% — giving a positive surprise to investors and analysts alike.

The stock exchanges opened in the green as the benchmark index Sensex going up by over 200 points. It however shed some of these gains later on.

eMudhra’s shares listed at ₹271, higher by 5.86%, while the price band was fixed at ₹243 - ₹256 per share.

The listing gains were unexpected as the unofficial grey market indicated that shares of the digital signature certificate provider would make a weak listing — possibly at a discount of ₹10.

The eMudhra IPO was open for subscription from May 20 to May 24. It was subscribed 2.72 times.

Analysts however ask the investors to ‘hold’ the stock for long term gains. Not only are its revenues growing steadily, it has also been able to improve its market share.

“It has a good list of its blue-chip clientele and has good growth prospects in the long term.

Investors can hold if having a long term view whereas others can book profits,” said Manoj Dalmia, founder and director at Proficient Equities Private.

Earlier too, many analysts suggested that investors should subscribe to the IPO on account of its financial performance and a unique business model.

eMudhra’s profitability has been rising consistently in the last three years as it has made a profit of 25 crore in FY21 as compared to ₹17 crore in FY20 along with steady growth in revenue. However, even the most favourable analysis also did not expect a good debut due to volatile markets.

"emudra is operating in a highly competitive segment. The current market scenario is not favourable for a good IPO listing. The company’s past performance and valuations also placed the issue price at the higher end. We expect EML to list at a discount price on listing day,” said Dr Ravi Singh, vice president and head of research at Share India.

eMudhra is a certifying authority (CA) engaged in the business of providing digital signature certificates in India to individuals and corporations.

Some of its customers from the corporate sector include Infosys, Tata Consultancy Services, Hindalco Industries, Larsen & Toubro Infotech JSW Steel, Bharti AXA Life Insurance.


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