EMA Partners India is a leading firm in the executive search and leadership assessment sector, established in 2003. Specializing in recruiting and developing leaders at the Board, C-Suite, and Senior Executive levels, the firm has served numerous local and international businesses. The company is now expanding through its IPO (Initial Public Offering), raising a total of ₹76.01 Crores through a Book Built Issue.

The IPO Structure consists of:

• A Fresh Issue of 53.34 lakh shares, valued at ₹66.14 Crores.
• An Offer for Sale of 7.96 lakh shares, totaling ₹9.87 Crores.

The IPO subscription period opened on January 17, 2025, and closed on January 21, 2025, with the allotment date expected on January 22, 2025. The shares are slated to be listed on NSE SME on January 24, 2025.

Price Band & Lot Size

• The price band for the IPO is ₹117 to ₹124 per equity share.
• The market capitalization of the company, at the upper price band, is ₹288.25 Crores.
• The lot size for retail investors is set at 1,000 shares, requiring a minimum investment of ₹1,24,000. For High Net-Worth Individuals (HNIs), the minimum investment is 2 lots, amounting to ₹2,48,000.

IPO Subscription and Market Insights

• The IPO subscription was recorded at 27.65 times on January 21, 2025, the final day of subscription.
• The Grey Market Premium (GMP) for the IPO is ₹0, indicating a stable but unremarkable market demand, and there has been no significant trading activity in the grey market.

EMA Partners India has also raised ₹21.65 Crores from Anchor Investors at ₹124 per share. The firm allocated 17,46,000 equity shares to anchor investors, which is a strong signal of institutional confidence in the company.

Objectives of the IPO

The company intends to use the proceeds from the IPO for several strategic purposes:

1. ₹2,553.16 Lakh to strengthen and expand the leadership team across the company and its subsidiaries.
2. ₹115.32 Lakh to upgrade its IT infrastructure, enhancing operational efficiency.
3. ₹542.70 Lakh for the repayment of office premises-related borrowings.
4. Additional funds will be allocated for general corporate purposes and potential inorganic acquisitions.

Financial Performance and Valuation Metrics

• The Revenue for the fiscal year ending July 31, 2024 stands at ₹2,632.90 Lakh, with a profit after tax (PAT) of ₹437.22 Lakh.
• The company’s pre-issue EPS for FY24 is ₹8.4, with a post-issue EPS projected at ₹6.14. The P/E ratio is 14.76x pre-issue and 20.20x post-issue, while the industry average is 40x, reflecting an appealing valuation at the current price band.
• Return on Capital Employed (ROCE) for FY24 is 31.70%, and Return on Equity (ROE) is 29.50%, indicating strong financial performance and efficient capital utilization.

IPO Review and Recommendation

Considering the financial health, growth potential, and industry outlook, the EMA Partners India IPO seems fairly priced. The pre-issue P/E ratio of 14.76x is reasonable when compared to the industry’s average of 40x. However, the Grey Market Premium (GMP) reflects no significant speculative demand, suggesting a cautious approach for potential investors.

Given the IPO’s pricing, the Listing Gain potential appears limited, and based on the current market environment and financial metrics, we recommend avoiding this IPO if looking solely for immediate listing gains.

For long-term investors seeking exposure to leadership recruitment services, EMA Partners India could offer a stable growth opportunity. Stay updated on the latest market movements and Top News Headlines.

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