IPO Alert: eMudhra files draft papers with SEBI to raise funds

The global digital trust services market, which includes transport layer security (TLS), secure sockets layer (SSL), digital signature certificates and internet of things, has a high potential for growth.

The digital trust services market in India was valued at ₹377.73 crores in the financial year 2021. The market has grown at a CAGR of 15.9% over the past five years and is expected to grow by 17.1% through 2026.

Digital signature certificate provider eMudhra Ltd. recently filed preliminary papers with capital markets regulator SEBI to raise funds through an initial share sale.

The initial public offering comprises fresh issuance of equity shares worth ₹200 crores and an offer for sale of 85.1 lakh shares by promoters and existing shareholders. The company may consider raising ₹39 crores through a pre-IPO placement, which would reduce the fresh issue size.

eMudhra plans to use ₹35 crores from the net proceeds for repayment or pre-payment of loans availed from Kotak Mahindra Bank. The company will utilize ₹40.22 crores to fund working capital and ₹46.36 crores for buying equipment and funding the development of data centres in India and overseas locations.

The company will employ ₹15 crores for funding expenditures related to product development and ₹15.27 crores for business development, sales & marketing and other growth initiatives.

Licensed Certifying Authority

eMudhra is one of India’s largest t licensed certifying authorities with a market share of 37.9% in the digital signature certificates market as of fiscal 2021, after growing from 36.5% in fiscal 2020. The company is engaged in the business of providing digital trust services and enterprise solutions to individuals and organizations across industries.

The Bengaluru-based company is a ‘one-stop shop’ player in secure digital transformation and provides a wide spectrum of services and solutions, ranging from the issuance of certificates to authentication and signing solutions.

Key Numbers

eMudhra recorded a total income of ₹132.45 crores in FY21, against ₹116.45 crores a year ago. Net profit stood at ₹25.36 crores, versus  ₹ 18.42 crores in the previous year.

The company’s operations are subject to various domestic and international laws and regulations related to privacy and data security. The company or its clients may face regulatory scrutiny if any security breach occurs.