Leading licenced Certifying Authority eMudhra is a long-term investment, given its unique business model, the market leadership position in the Indian Digital Trust Services space, better brand recognition and stronger channel partner relationship, experts said.
The stock opened at Rs 271 on the BSE, up nearly 6 percent over issue price and climbed up to Rs 279 intraday (up 9 percent). So far it managed to hold on to its issue price despite volatility in the equity market.
It was trading at Rs 263.15 on the BSE, higher by 2.8 percent with a volume of 3.88 lakh shares at 11:52am. Its traded volume on the National Stock Exchange was 54.6 lakh equity shares.
"We are more optimistic on the longer term outlook of the company as the company being largest licensed certifying authority in India is a one-stop shop solutions provider in secure digital transformation and is well-positioned to capture the favourable industry dynamics in India and globally," Astha Jain, Senior Research Analyst at Hem Securities, said.
It had a market share of 37.9 percent in the digital signature certificates market space for FY21. It provides Digital Trust Services and Enterprise Solutions to individuals and organisations functioning in various industries.
Being a unique Indian company with presence across all the three segments of Digital Trust Services, Digital Security Solutions and Paperless Transformation Solutions, eMudhra is one of the largest players in the Indian Digital Trust Services market, with a market share of 17.8 percent.
Despite being just 12 years in the market, eMudhra has better brand recognition and stronger channel partner relationship, Astha said.
Saurabh Joshi, Research Analyst at Marwadi Financial Services, also said that investors should consider holding eMudhra for long-term investment as the company is the largest licensed certifying authority in India.
The valuations of the IPO are also reasonable, considering the future growth potential of the company, the expert said, adding those applicants who have not applied or didn't get the allotment can take advantage of a tepid listing to make a fresh investment in eMudhra from a long-term perspective.
It is the only Indian company to be directly recognised by renowned browsers and document processing software companies such as Microsoft, Mozilla, Apple and Adobe, allowing it to sell digital identities to individuals and organizations worldwide and issue SSL/TLS certificates for website authentication.
The company recorded a 38 percent growth in profit at Rs 25.4 crore for the financial year 2020-21, compared to previous year, and revenue during the same period grew by 13 percent to Rs 131.60 crore.
It has surpassed its FY21 profit in nine months period ended December 2021 at Rs 30.3 crore on revenue of Rs 137.2 crore.
Prashanth Tapse, Vice President (Research), Mehta Equities likes the company's unique business model with high-growth scope and its well-positioned market leadership in the Indian Digital Trust Services space to capture the next digital growth in India as well as globally. Hence one can consider for a long term investing point of view, he advised.
Allotted investors can choose holding this company for long-term perspective despite short-term volatility which can't be ruled out while non-allotted investors may also look to accumulate, he said.
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