ECOS (India) Mobility IPO subscribed 31x on Day 2 so far; HNI portion booked over 61 times

The initial public offering (IPO) of ECOS (India) Mobility & Hospitality continued to attract decent investor response during the third and final day of bidding process as institutional bidders also joined the party. The issue was booked a little more than 3.4 times on the first day of the bidding, while ended day two with over 9.5 times bidding.
 

The ECOS (India) Mobility & Hospitality is selling its shares in the price band of Rs 318-334 apiece. Investors can apply for a minimum of 44 shares and its multiples thereafter. It is looking to raise Rs 601.20 crore via IPO, which is entirely an offer-for-sale of up to 1.80 crore equity shares.
 

According to the data, the investors made bids for 39,38,17,7326 equity shares, or 31.26 times, compared to the 1,26,00,000 equity shares offered for the subscription by 2.35 pm on Friday, August 29. The three-day bidding for the issue, which kicked off on Wednesday, August 28, concludes today.
 

The allocation for non-institutional investors (NIIs) was subscribed 60.99 times, while the portion reserved for retail investors saw a subscription of 17.05 times. However, the quota set aside for qualified institutional bidders (QIBs) quota was subscribed 33.82 times as of the same time.
 

Incorporated in February 1996, ECOS (India) Mobility & Hospitality (EHML) is a chauffeur driven car rental service provider in India. The New Delhi-based company's primary business is to provide chauffeured car rentals and employee transportation services. It has been offering these services to corporate clients, including Fortune 500 companies in India.
 

The grey market premium of ECOS (India) Mobility has seen a mild correction amid the rising volatility in the broader markets. Last heard, the company was commanding a premium of Rs 125 per share in the unofficial market, suggesting a listing pop of about 38 per cent for the investors. However, the premium in the grey market stood around Rs 155 a day ago.
 

Brokerages are mostly positive on the issue suggesting investors to subscribe to it for a long-term citing their strong market share, long term relations with the customers, pan India presence, and strong and consistent financial performance. However, client satisfaction, relationships with vendors, dependence on major customers and entirely an OFS are the key concerns.
 

EMHL follows an asset light business model, owning only 6 per cent of its total fleet, while managing the remaining through vendors across 97 cities in India. EMHL demonstrated the highest asset utilization among its peers for FY23, indicating efficient resource management and an asset-light business model, enabling the company to meet demand, said Geojit Financial Services.
 

"EMHL is available at a P/E ratio of 32 times (FY24), which seems fully priced. Considering its leading position in the industry with a large fleet size compared to peers, a robust client retention ratio of 90 per cent, increasing penetration in Tier-II and Tier-III cities, and a robust financial & margin profile, we assign a 'subscribe' rating on a short- to medium term basis," it said.
 

For the financial year ended on March 31, 2024, ECOS Mobility reported a net profit of Rs 62.53 crore, with a revenue of Rs 568.21 crore. The company's bottomline came in at Rs 43.59 crore with a revenue of Rs 425.43 crore in the financial year 2022-23.
 

Ahead of its IPO, ECOS Mobility raised Rs 180.36 crore from anchor investors by allocating 54 lakh equity shares at Rs 334 apiece. 50 per cent for the offer has been reserved for qualified institutional bidders (QIBs), while non-institutional investors will get 15 per cent of the primary offering by ECOS Mobility. Retail investors will have 35 per cent of the net offer allocated for them.
 

Considering the FY24 EPS of Rs 10.42 on a post issue basis, the company is going to list at a P/E of 32.05 times with a market cap of Rs 2,004 crore, whereas its peers namely Wise Travel India, and Shree OSFM EMobility are trading at P/E of 28 times, and 34.6 times respectively, said Marwadi Financial Services.
 

"We assign a 'subscribe' rating to this IPO as the company is India’s largest chauffeur driven mobility provider and has long-standing customer relationships. Also, it is available at reasonable valuation as compared to its peers," it said.
 

IIFL Securities and Equirus Capital are the book running lead managers of the ECOS Mobility IPO, while Link Intime is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with September 4, Wednesday as the tentative date of listing on the bourses.