e-Mudhra Files DRHP with SEBI for IPO
If you have ever used digital signature certificates for transacting of any of the routine businesses, you would be familiar with e-Mudhra.
A digital signature is a computer embedded code that is downloaded on to your PC or laptop and can be used to digitally sign documents since the digital signature is equivalent to an actual signature for all legal purposes.
The largest player in the issue of digital signature certificates in India is e-Mudhra. Currently, in India, e-Mudhra is the largest licensed certifying authority for the issue of digital signatures and has over one-third of the Indian digital signature market.
To further expand its digital signature franchise and to give partial exit to early investors and promoters, e-Mudhra is now planning a public issue.
The proposed initial public offer will be a combination of a fresh issue and an offer for sale. The fresh issue will be to the tune of Rs.200 crore while e-Mudhra will offer 85,10,638 shares under the OFS.
Some of the promoters and early investors offering shares in the OFS include Venkatraman Srinivasan 32.89 lakh shares, Taarav Pte Ltd 31.91 lakh shares, Kaushik Srinivasan, 5.11 lakh shares, Arvind Srinivasan 8.82 lakhs shares and others 1.33 lakh shares.
E-Mudhra is also planning to raise Rs.39 crore via pre-IPO placement, in which case the issue size will be reduced accordingly.
Out of the fresh funds raised by the company in the IPO, it will deploy Rs.46 crore for equipment purchase and data centre costs, Rs40 crore for working capital and Rs.35 crore for debt repayment. It will also allocate Rs.15 crore each for product development and to invest in E-Mudhra Inc.
E-Mudhra has a 38% market share as of the end of FY21 and has till date issued more than 5 crore digital certificates since its inception.
Digital certificates are mandatory for filing income tax returns, ROC filings, foreign trade, filing of tenders, railway documentation, banking documentation etc. All directors of any organization are mandatorily required to only sign documents digitally.
For FY21, E-Mudhra had reported revenues of Rs.131.59 crore and net profits of Rs.25.35 crore. Its profits promise to grow substantially if you go by the Rs.92 crore revenue and Rs.20 crore profit reported for the first half of FY22. The issue will be lead managed by IIFL Securities and Yes Securities.
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