Should you invest in eMudhra Limited IPO?

eMudhra Limited incorporated on June 16, 2008, is India’s largest licensed Certifying Authority with a market share of 37.9% in the digital signature certificates market space in Financial Year 2021 having grown from 36.5% in Financial Year 2020. It is a wholly-owned subsidiary of 3i Infotech Limited. The company is engaged in the business of providing Digital Trust Services and Enterprise Solutions to individuals and organizations functioning in various industries. Under Digital Trust Services, eMudhra issues 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 their Enterprise Solutions vertical, eMudhra offers a diverse portfolio of Digital Security and Paperless Transformation Solutions complementing their Digital Trust Services business, to customers engaged in different industries, thereby making eMudhra a ‘one-stop shop’ player in secure digital transformation.

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The company has issued over 50 million digital signature certificates through the network of 88,457 channel partners spread across India. As of September 30, 2021, the company is serving 36,233 retail customers and 563 enterprises. It also works closely with large government and banking customers like 20+ Public and private sector banks and state governments.

Promoters & Shareholding:

Venkatraman Srinivasan and Taarav Pte. Limited are the company promoters. 

Pre Issue Share Holding79.19%
Post Issue Share Holding61.03%

Public Issue Details:

Offer for sale: Fresh issue of approx. 6,289,062 equity shares at Rs. 5, aggregating up to Rs. 161 Cr and OFS of approx. 9,835,394 equity shares, aggregating up to Rs. 251.79 Cr.

Total IPO Size: Rs. 412.79 Cr.

Price band: Rs. 243 – Rs. 256.

Objective: For repayment or pre-payment, Purchase of equipment and funding of other related costs, Funding of expenditure relating to product development, and for general corporate purposes.

Bid qty: minimum of 58 shares (1 lot) for Rs. 14,848 and maximum of 13 lots.

Offer period: 20th May 2022 – 24th May 2022.

Date of listing: 1st June 2022.

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∙ The Largest licensed Certifying Authority in India.

∙ Only Indian company to be admitted as a member of European Cloud Signature Consortium as well as Certifying Authority / Browser Forum.

∙ eMudhra’s digital signature certificates are directly recognized by browsers across the world.

∙ Diverse, longstanding, and growing customer base.

∙ Professional and experienced management team.


∙ The company plans on expanding to areas where it has not operated before.

∙ Dependent on one channel partner (Bluesky Infotech) for a significant portion of its revenues.

∙ The industry is competitive and it faces significant competition from both established and new companies offering trust services.

∙ The company uses open-source software in its products, which could subject them to litigation or other action.

∙ Some of its Subsidiaries and Bluesky Infotech, an entity forming part of the Promoter Group and one of its Group Companies may have a conflict of interest as they are engaged in a similar business or industry segments.

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Sectorial outlook – The global Digital Security and Paperless Transformation market was valued at $11.35 Bn by the end of FY 2021 and is expected to grow at a CAGR of 17.4% to value at $25.29 Bn by the end of FY 2026 and India is expected to be one among the fastest-growing markets at CAGR 27.5%, ahead of the other developed economies. The rise of COVID-19 resulted in governments imposing social distancing norms and lockdowns. This forced organizations to move to “Work from Home” resulting in the need for the adoption of digital solutions that facilitated remote fulfillment of transactions. The use of digital solutions peaked during the pandemic and helped contain the spread of the virus as people did not need to physically visit places. People started using online applications for making payments, filling up and signing forms, and transacting online to avoid cash or submitting forms. Paperless solutions experienced a huge spike in demand for signing documents and are expected to stay for long as digital becomes the future. e-Sign is one of the most important digital and paperless solutions. The Indian government has been laying strong focus on e-Sign which is part of the Digital India campaign.

The financials (revenue and net profit) are shown in the graph below:

Valuation – For the last 3 years average EPS is Rs. 2.49 and the P/E is around 103x on the upper price band of Rs. 949. The EPS for FY21 is Rs. 2.45 and the P/E is around 104x and if we annualize FY22 earnings then the asking price is at a P/E of 44x. It has no listed peers as per the RHP. The company P/E is between 104x and 44x.

Recommendation – The Largest licensed Certifying Authority in India and it has been able to continue to grow its revenue and margins but It also operates in a highly competitive market and faces competition from large global players including Adobe and DocuSign etc. After considering all the factors and the current market situation it would be better to AVOID the IPO for now but investors may consider investing on dips from a long term investment horizon.


This article should not be construed as investment advise, please consult your Investment Adviser before making any sound investment decision. If you do not have one visit

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