Ecos India Mobility IPO - Investment Rationale, Issue Details, Financials, Risks And More: Anand Rathi

Anand Rathi Report

Ecos (India) Mobility and Hospitality Ltd. will launch its initial public offering tomorrow and the offer closes on Aug. 30. The Rs 601.2 crore IPO comprises of a total offer for sale of 1.8 crore shares and no fresh issue component.

The largest and most profitable chauffeur driven mobility provider to corporates in India has set a price band in the range of Rs 318–334 per share. The minimum lot size for retail investors is 44 shares.

Objects of the Issue

• The company will not receive any proceeds from the Offer. Instead, all proceeds will go to the Selling Shareholders, allocated according to the number of Offered Shares each Selling Shareholder sells as part of the Offer.

Valuation and outlook

ECOS (India) Mobility & Hospitality is a chauffeur driven car rental service provider in India. The company's primary business is to provide chauffeured car rentals and employee transportation services.

The company is the leader in chauffeur driven car services for corporate customers and is a niche player in B2B segment for corporate employees/customers/guests’ mobility.

At the upper price band company is valuing at price/earning of 32.1 times with a market cap of Rs 2004 crore post issue of equity shares and return on net worth of 42.7%.

On the valuation front, we believe that the company is fairly priced. Thus, we recommend a “Subscribe” rating to the IPO.

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