Ecos India Mobility & Hospitality Ltd. IPO
A comprehensive review of the Ecos India Mobility & Hospitality Limited (EIMHL) initial public offering (IPO). EIMHL is the largest chauffeur driven mobility provider for corporates in India, offering chauffeured car rentals (CCR) and employee transportation services (ETS). The IPO aims to unlock the company's value through listing on the stock market.
RI
by RA ALOK DAIYA SEBI Reg. INH000011468
Company Overview
Ecos (India) Mobility & Hospitality Ltd. (EIMHL) is the largest and most profitable chauffeur driven mobility provider to corporates in India, in terms of revenue from operations and profit after tax for Fiscal 2023. The company primarily provides chauffeured car rentals (CCR) and employee transportation services (ETS) to corporate customers, including Fortune 500 companies in India, for more than 25 years.
1
Pan-India Presence
As of March 31, 2024, EIMHL had a presence in 109 cities through its own vehicles and vendors, spread across 21 states and four union territories in India.
2
Extensive Fleet
The company operates a fleet of more than 12,000 economy to luxury cars, mini vans and luxury coaches, including specialty vehicles.
3
Asset-Light Model
EIMHL operates on an asset-light model, keeping the number of owned vehicles significantly lower than vendor-operated vehicles.
4
Global Reach
The company has the capability of providing CCR services in over 30 countries through its global network of vendors.
Business Segments and Services
Chauffeured Car Rentals (CCR)
The CCR segment is a B2B2C business, where customers are corporate companies, and the end consumer is an employee, client, guest or visitor of these corporate companies. EIMHL provides CCR services in 94 cities in India as of Fiscal 2024.
Employee Transportation Services (ETS)
Through the ETS segment, EIMHL offers customers solutions to manage their employee home-office-home ground transportation. The company provides ETS in 10 cities in India.
Additional Services
EIMHL also offers self-drive cars in Delhi, Gurugram, Mumbai and Bengaluru, as well as global car rental services through vendors in over 30 countries.
Financial Performance
For the last three fiscals, the company has posted an average EPS of Rs. 7.91 and an average RoNW of 39.41%. The issue is priced at a P/BV of 11.30 based on its NAV of Rs. 29.57 as of March 31, 2024. Based on FY24 earnings, the asking price is at a P/E of 32.05.
IPO Details
1
Offer Structure
The company is coming out with its maiden secondary IPO of offer for sale (OFS) of 18000000 shares worth Rs. 601.20 cr. at the upper cap.
2
Price Band
The company has announced a price band of Rs. 318 - Rs. 334 per equity shares of Rs. 2 each.
3
Subscription Period
The issue opens for subscription on August 28, 2024, and will close on August 30, 2024.
4
Listing
Post allotment, shares will be listed on BSE and NSE.
IPO Timeline
1
IPO Open Date
The IPO opens for subscription on Wednesday, August 28, 2024. Investors can apply for the IPO during this period.
2
IPO Close Date
The IPO closes on Friday, August 30, 2024, at 5 PM. Investors must submit their bids by this time.
3
Basis of Allotment
The basis of allotment will be finalized on Monday, September 2, 2024, and will be communicated to all applicants.
4
Initiation of Refunds
Refunds will be initiated on Tuesday, September 3, 2024, for unsuccessful applicants.
5
Credit of Shares to Demat
Shares will be credited to the Demat accounts of successful applicants on Tuesday, September 3, 2024.
6
Listing Date
EIMHL shares will be listed on the BSE and NSE on Wednesday, September 4, 2024.
Investment Rationale
Market Leader
EIMHL is the largest CCR and ETS service provider in India, gaining momentum in the corporate mobility sector.
Strong Financial Performance
The company posted remarkable performances for FY23 and FY24, indicating positive future prospects.
Listing Benefits
The IPO will unlock EIMHL's value and increase its visibility, which augurs well for future prospects.
Pricing Considerations
Based on FY24 earnings, the issue relatively appears fully priced, suggesting careful consideration for investors.
Analyst Recommendation
Investors may park funds for medium to long term.
The company is the leader in chauffeur driven car services for corporate customers and has a niche place in the B2B segment for corporate employees/customers/guests' mobility. After suffering during the Pandemic, it gained momentum and posted good growth in its performances for FY23 and FY24. Though this is a pure secondary offer, post listing, higher visibility and unlocking the value, it can get more preference as a listed company for its business.
Additional Information
Dividend Policy
The company has paid a dividend of 127.50% for FY24 and has adopted a dividend policy in March 2024.
Listed Peers
EIMHL has shown Wise Travel India and Shree OSFM E-Mobility as their listed peers, trading at P/E ratios of 28.0 and 35.4 respectively (as of August 23, 2024).
BRLMs
The two BRLMs associated with the offer have handled 56 public issues in the past three fiscals, out of which 18 issues closed below the offer price on the listing date.
Allotment and Listing
The ECO Mobility IPO allotment status will be available on or around September 2, 2024, with shares credited to demat accounts by September 3, 2024. The ECO Mobility IPO is planned to list on September 4, 2024, at BSE and NSE.