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eMudhra Limited Capital/Financing Update 2024

Aug 9, 2024

59109_rns_2024-08-09_1f5cc075-f2e8-4acd-899e-630125934d57.pdf

Capital/Financing Update

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EL/SEC/2024-25/ 57

August 09, 2024

Corporate Relationship Department BSE Limited 1st Floor, New Trading Ring Rotunda Building, P J Towers, Dalal Street, Fort, Mumbai - 400 001

Script Code: 543533

The Manager, Listing Department National Stock Exchange of India Limited "Exchange Plaza', C-1, Block G, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051

Symbol: EMUDHRA

Dear Sir/Madam,

Sub: Monitoring Agency Report for the quarter ended June 30, 2024

Pursuant to Regulation 32(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and 41(4) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, please find enclosed herewith Monitoring Agency Report in respect of the utilization of proceeds of QIP for the quarter ended June 30, 2024 issued by CRISIL Ratings Limited, Monitoring Agency.

This is for your information and records.

Thanking you

Yours faithfully,

For eMudhra Limited

Digitally signed JOHNSO by JOHNSON XAVIER N XAVIER Date: 2024.08.09 11:38:42 +05'30'

Johnson Xavier Company Secretary & Compliance Officer Membership No. A28304

Encl: As Above.

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Monitoring Agency Report for eMudhra Limited for the quarter ended June 30, 2024

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CRL/MAR/EMULIM/2024-25/1145

August 06, 2024

To

eMudhra Limited

Plot No 12-P1-A & 12-P1-B, Hi-Tech Defence and Aerospace Park (IT sector), Jala Hobli, BK Palya, Bangalore, Karnataka - 562149

Dear Sir,

Monitoring Agency Report for the quarter ended June 30, 2024 - in relation to the Qualified Institutional Placement (“QIP”) of eMudhra Limited (“the Company”)

Pursuant to Regulation 173A of SEBI (lssue of Capital and Disclosure Requirements) Regulations, 2018 (“ SEBI ICDR Regulations ”) and Monitoring Agency Agreement dated January 12, 2024 enclosed herewith the Monitoring Agency Report, issued by CRISIL Ratings Limited, Monitoring Agency, as per Schedule XI of the SEBI ICDR Regulations towards utilization of proceeds of QIP for the quarter ended June 30, 2024.

Request you to kindly take the same on records.

Thanking you,

For and on behalf of CRISIL Ratings Limited

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Sushant Sarode

Director, Ratings (LCG)

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Report of the Monitoring Agency (MA)

Name of the issuer: eMudhra Limited

For quarter ended: June 30, 2024

Name of the Monitoring Agency: CRISIL Ratings Limited

(a) Deviation from the objects: No

  • (b) Range of Deviation: Not applicable

Declaration:

We declare that this report provides an objective view of the utilization of the issue proceeds in relation to the objects of the issue based on the information provided by the Issuer and information obtained from sources believed by it to be accurate and reliable. The MA does not perform an audit and undertakes no independent verification of any information/ certifications/ statements it receives. This Report is not intended to create any legally binding obligations on the MA which accepts no responsibility, whatsoever, for loss or damage from the use of the said information. The views and opinions expressed herein do not constitute the opinion of MA to deal in any security of the Issuer in any manner whatsoever. Nothing mentioned in this report is intended to or should be construed as creating a fiduciary relationship between the MA and any issuer or between the agency and any user of this report. The MA and its affiliates also do not act as an expert as defined under Section 2(38) of the Companies Act, 2013.

The MA or its affiliates may have credit rating or other commercial transactions with the entity to which the report pertains and may receive separate compensation for its ratings and certain credit-related analyses. We confirm that we do not perceive any conflict of interest in such relationship/interest while monitoring and reporting the utilization of the issue proceeds by the issuer.

We have submitted the report herewith in line with the format prescribed by SEBI, capturing our comments, where applicable. There are certain sections of the report under the title “Comments of the Board of Directors”, that shall be captured by the Issuer’s Management / Audit Committee of the Board of Directors subsequent to the MA submitting their report to the issuer and before dissemination of the report through stock exchanges. These sections have not been reviewed by the MA, and the MA takes no responsibility for such comments of the issuer’s Management/Board.

Signature:

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Name and designation of the Authorized Signatory: Sushant Sarode Designation of Authorized person/Signing Authority: Director, Ratings (LCG)

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1) Issuer Details:

Name of the issuer: eMudhra Limited Names of the promoter: Venkatraman Srinivasan, and Taarav Pte Limited Industry/sector to which it belongs : IT Enabled Services Issue Details Issue Period: Friday, January 12, 2024 to Wednesday, January 17, 2024 Type of issue (public/rights): Qualified Institutional Placement (QIP) Type of specified securities: Equity Shares QIP Grading, if any: NA Issue size: Rs 2,000.00 million (Gross proceeds); Rs.1,930.01 Million (Net Proceeds*)

2) Issue Details

  • CRISIL Ratings shall be monitoring the net proceeds amount.

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3) Details of the arrangement made to ensure the monitoring of issue proceeds:

Particulars Reply Source of information/
certifications
considered by
Monitoring Agency
for preparation of
report		 Comments of
the
Monitoring
Agency		 Comments
of the
Board of
Directors
Whether all utilization is as per the
disclosures in the Offer Document?		 Yes Management
undertaking,
Statutory Auditor
Certificate^
Placement Document,
Bank Statements		 No Comments Yes
Whether shareholder approval has been
obtained in case of material deviations
from expenditures disclosed in the Offer
Document?		 NA Statutory Auditor
Certificate^,
Management
undertaking		 No Comments NA
Whether the means of finance for the
disclosed objects of the issue has changed?		 NA No Comments NA
Is there any major deviation observed over
the earlier monitoring agency reports?		 No No Comments No
Whether
all
Government/statutory
approvals related to the object(s) have been
obtained?		 NA No Comments NA
Whether all arrangements pertaining to
technical assistance/collaboration are in
operation?		 NA No Comments NA
Are there any favorable events improving
the viability of these object(s)?		 No No Comments No
Are there any unfavorable events affecting
the viability of the object(s)?		 No No Comments No
Is there any other relevant information that
may materially affect the decision making
of the investors?		 No No Comments No

NA represents Not Applicable

^Certificate dated July 24, 2024 issued by Suri & Co., Chartered Accountants (Firm Registration Number: 004283S), Statutory Auditors of the Company.

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4) Details of object(s) to be monitored:

i. Cost of the object(s):

Sr.
No.		 Item
Head		 Source of
information/
certification
considered by
MA for
preparation of
report		 Original
cost
(as per the
Offer
Document)
(Rs in
million)		 Revised
Cost
(Rs in
million)		 Comment of
the MA		 Comments of the Board of Directors
Reason of
Cost
revision		 Proposed
financing
option		 Particular
s of firm
arrange-
ments
made
1 Funding of
expenditure
relating to product
development by
the Company and
by eMudhra INC,
one of the
Subsidiaries		 Management
undertaking,
Statutory
Auditor
Certificate^,
Placement
Document		 407.8 NA No
comments		 NA NA NA
2 Investment in
eMudhra INC for
funding their
working capital
requirements		 270.0 NA No
comments		 NA NA NA
3 Funding the
Company’s
inorganic growth
initiatives by itself
or by investing in
its Indian and /or
Overseas
Subsidiaries		 850.0 NA No
comments		 NA NA NA
4 General Corporate
Purposes#		 402.21 NA No
comments		 NA NA NA
Total - 1930.01 - - - - -

^Certificate dated July 24, 2024 issued by Suri & Co., Chartered Accountants (Firm Registration Number: 004283S), Statutory Auditors of the Company.

#The amount utilised for general corporate purposes does not exceed 25% of the Gross Proceeds (amounting to Rs 482.50 million) from the Issue.

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ii. Progress in the object(s):

Sr.
No.
Amount utilized Comments of the Board
Source of
(Rs in million) of Directors
information/ Amount
certifications as
considered by
proposed		 Total Comments of

Monitoring

in the		 unutilized the
As at At the

**Item Head# **
Agency for		 Offer
During		 amount Monitoring

beginning		 end Reasons Proposed

preparation of
Document
the		 (Rs in
Agency

of the		 of the for idle course of

report
(Rs in		 quarter million)
quarter quarter funds action

million)
1 Funding of
expenditure relating
to product
development by the
Company and by
eMudhra INC, one
of the Subsidiaries
Management
undertaking,
Statutory
Auditor
Certificate^,
Placement
Document,
Bank
Statements
 407.8 32.34 109.33 141.67 266.13 No
comments		 Funds will be utilised
as per the prospectus
2 Investment in
eMudhra INC for
funding their
working capital
requirements
270.0		 144.71 10.54 155.25 114.75 No
comments
3 Funding the
Company’s
inorganic growth
initiatives by itself or
by investing in its
Indian and /or
Overseas
Subsidiaries		 850.0 - - - 850.00 No
comments
4 General Corporate
Purposes		 402.21 9.00 143.23 152.23 249.98 No
comments
Total 1,930.01 186.05 263.11
(Refer note 1)		 449.15 1,480.86 - -

^Certificate dated July 24, 2024 issued by Suri & Co., Chartered Accountants (Firm Registration Number: 004283S), Statutory Auditors of the Company.

Note 1: During the reported quarter, net proceeds amounting to Rs 136.79 million are reimbursed against internal accruals utilised during last quarter from eMudhra Limited account by transferring Net proceeds from eMudhra Limited MA account to eMudhra Limited account for Object 1 and Object 4. The same has been considered towards utilization of net proceeds during the reported quarter.

Note 2: Internal accruals amounting to Rs 40.57 million were utilized from eMudhra Limited account towards object 1 and object 4, for operational ease as Net proceeds were invested in FDs. The amount of Rs 40.57 million will be reimbursed through transfer of net proceeds to eMudhra Limited account from eMudhra Limited MA account. The same has not been considered towards utilisation of net proceeds during the reported quarter.

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#Brief description of objects:

Object of the Issue Description of objects asper the offer document filed by the issuer
Funding of expenditure relating to
product development by the
Company and by eMudhra INC,
one of the Subsidiaries		 Company is into Technology solutions and provides products for e-digital
signatures and other authentication services. Company plans to develop new
products in the areas of identity management, authentication and authorization
or digital signatures for its customers and plans to use available net proceeds
under this Object towards these objectives.
Investment in eMudhra INC for
funding their working capital
requirements		 As Company plans to develop new products in the areas of identity management,
authentication and authorization or digital signatures for its customers, it
proposes to utilise Rs 270.00 million towards funding the working capital
requirements of one of its Subsidiaries, eMudhra INC in the ordinary course of
the business.
Funding the Company’s inorganic
growth initiatives by itself or by
investing in its Indian and /or
Overseas Subsidiaries		 Company proposes to deploy, to the extent of Rs 850.00 million, towards strategic
acquisitions and investments towards inorganic growth. The amount of Net
Proceeds to be used for acquisitions will be based on management’s decision and
may not be the total value or cost of any such acquisitions but is expected to
provide with sufficient financial leverage topursue such acquisitions.
General Corporate Purposes As per placement document filed by the Company, General corporate purposes
may include, but are not restricted to,
i.
Funding growth opportunities
ii.
Business development initiatives
iii.
Meeting expenses incurred in the ordinary course of business
iv.
Towards any exigencies or any other purpose, as may be approved
by the Board
The quantum of utilisation of funds towards each of the above purposes will be
determined by the Board, based on the amount actually available under this head
and the business requirements of Company, from time to time, subject to
compliance with applicable law.

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iii. Deployment of unutilised proceeds:

On the basis of management undertaking and Certificate dated July 24, 2024 issued by Suri & Co., Chartered Accountants (Firm Registration Number: 004283S), Statutory Auditors of the Company.

S.
No.		 Type of instrument where
amount is invested		 Amount
invested
(Rs in
million)		 Maturity
date		 Earnings
(Rs in
million)		 Return on
Investment
(%)		 Market
value as at
the end of
quarter
(Rs in
million)
1 FD Kotak(No. 4450360851) 40.00 17-Jul-24 0.29 5.95% 40.29
2 FD Kotak(No. 4450391565) 860.00 08-Jul-24 1.30 5% 861.30
3 FD Karur Vysya Bank (No.
1317467000000040/6)		 100.00 08-Jul-24 0.10 6.25% 100.10
4 FD ICICI Bank(041110017446) 100.00 18-Sep-24 0.20 6.50% 100.20
5 MA Account balance* 152.08 NA NA NA 152.08
6 eMudhra INC account
balance^		 233.80 NA NA NA 233.80
Total 1,485.88 1.89 1487.76

*Interest received on closure of FDs amounted to Rs 25.93 Mn out of which Rs 24.83 million was transferred to eMudhra Current account for business purpose and remaining amount of Rs 1.10 million is lying in MA account as at the end of reported quarter.

^ During the previous quarter, Allocation out of net proceeds towards PQC (Post Quantum Cryptography) as per the placement document was Rs 183.92 million, out of this amount Rs 180.00 Mn was invested by overseas direct investment from MA account of eMudhra to its subsidiary eMudhra Inc account and balance Rs 3.92 million was transferred from internal accruals of eMudhra KVB account to eMudhra Inc account, as the net proceeds were invested in FDs and Company was not willing to prematurely redeem these FDs.

This amount of Rs 3.92 million will be reimbursed in next quarter from eMudhra MA account to eMudhra KVB account as the same was missed to be withdrawn by the Company in Q1 FY 2025.

iv. Delay in implementation of the object(s)^:

Comments of the Board of Comments of the Board of
Completion Date
Directors
Delay
As per the
 Proposed course
Object(s) (no. of days/ Reason of
Offer Actual
months)
delay		 of
Document action
Not applicable

^On the basis of management undertaking and Certificate dated July 24, 2024 issued by Suri & Co., Chartered Accountants (Firm Registration Number: 004283S), Statutory Auditors of the Company.

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5) Details of utilization of proceeds stated as General Corporate Purpose (GCP) amount in the offer document^:

S. No. Item heads Amount(in Mn) Remarks
1 UIDAI Expenses 13.82 As approved by the board of
directors of the Company
vide board resolution dated
April 29, 2024
2 Employee Sales Incentive FY 24-25 8.69
3 Marketing& Business Promotion Exp 1.09
4 Web HostingExpenses 4.76
5 Variablepayfor FY 23-24 21.48
6 Employee Transportation 4.07
7 Professional charges 3.41
8 Travel & Boarding 1.96
9 Rent Expenses 2.03
10 Housekeeping& SecurityExpenses 1.84
11 Broadband Leaded Lines 1.17
12 Annual Maintenance charges 0.92
13 Repayment of lease liability 74.07
14 Business Promotion Expenses 3.92
143.23

^ On the basis of management undertaking and Certificate dated July 24, 2024 issued by Suri & Co., Chartered Accountants (Firm Registration Number: 004283S), Statutory Auditors of the Company.

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Disclaimers:

  • a) This Report is prepared by CRISIL Ratings Limited (hereinafter referred to as "Monitoring Agency” / “MA" / “CRL”) . The MA has taken utmost care to ensure accuracy and objectivity while developing this Report based on the information provided by the Issuer and information obtained from sources believed by it to be accurate and reliable. The views and opinions expressed herein do not constitute the opinion of MA to deal in any security of the Issuer in any manner whatsoever.

  • b) This Report has to be seen in its entirety; the selective review of portions of the Report may lead to inaccurate assessments. For the purpose of this Report, MA has relied upon the information provided by the management /officials/ consultants of the Issuer and third-party sources like statutory auditors (or from peer reviewed CA firms) appointed by the Issuer believed by it to be accurate and reliable.

  • c) Nothing contained in this Report is capable or intended to create any legally binding obligations on the MA which accepts no responsibility, whatsoever, for loss or damage from the use of the said information. The MA is also not responsible for any errors in transmission and specifically states that it, or its directors, employees do not have any financial liabilities whatsoever to the users of this Report.

  • d) The MA and its affiliates do not act as a fiduciary. The MA and its affiliates also do not act as an expert to the extent defined under Section 2(38) of the Companies Act, 2013. While the MA has obtained information from sources it believes to be reliable, it does not perform an audit and undertakes no independent verification of any information/ certifications/ statements it receives from auditors (or from peer reviewed CA firms), lawyers, chartered engineers or other experts, and relies on in its reports.

  • e) The MA or its affiliates may have other commercial transactions with the entity to which the report pertains. As an example, the MA may rate the issuer or any debt instruments / facilities issued or proposed to be issued by the issuer that is subject matter of this report. The MA may receive separate compensation for its ratings and certain creditrelated analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors.

  • f) The MA report is intended for the jurisdiction of India only. This report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the report is to be construed as CRL providing or intending to provide any services in jurisdictions outside India, where it does not have the necessary licenses and/or registration to carry out its business activities referred to above.

  • g) Access or use of this report does not create a client relationship between CRL and the user.

  • h) CRL is not aware that any user intends to rely on the report or of the manner in which a user intends to use the report. In preparing this report, MA has not taken into consideration the objectives or particular needs of any particular user.

  • i) It is made abundantly clear that the report is not intended to and does not constitute an investment advice. The report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of any kind to enter into any deal or transaction with the entity to which the report pertains. The report should not be a basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).

  • j) The report comprises professional opinion of CRL as of the date they are expressed, based on the information received from the issuer and other sources considered reliable by CRL. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as of the stated date of their issue. The report does not constitute statements of fact or recommendations to purchase, hold or sell any securities/instruments or to make any investment decisions.

  • k) Neither CRL nor its affiliates, third-party providers, as well as their directors, officers, shareholders, employees or agents guarantee the accuracy, completeness or adequacy of the report, and shall not have any liability for any errors, omissions or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the report. CRL and each aforesaid party disclaims any and all express or implied warranties, including but not limited to any warranties of merchantability, suitability or fitness for a particular purpose or use or use. In no event shall CRL or any aforesaid party be liable to any user for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including, without limitation, lost

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  • income or lost profits and opportunity costs) in connection with any use of any part of the report even if advised of the possibility of such damages.

  • l) CRL has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with the preparation of this report. CRL has in place a code of conduct and policies for managing conflict of interest.

  • m) Unless required under any applicable law, this report should not be reproduced or redistributed to any other person or in any form without prior written consent from CRL.

  • n) By accepting a copy of this Report, the recipient accepts the terms of this Disclaimer, which forms an integral part of this Report.

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