| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 318 to ₹ 334 | 44 | 28th Aug, 2024 – 30th Aug, 2024 | ₹601.20 Cr |
About ECOS Mobility and Hospitality Ltd IPO
Incorporated in February 1996, ECOS Mobility and Hospitality Ltd. is a chauffeur driven car rental service provider in India. It is the largest and most profitable chauffeur driven mobility service provider in India as of March 2023. The company is primarily engaged in providing chauffeured car rentals (CCR) and employee transportation services (ETS). For more than 25 years, it has been delivering these services to corporate clients, including Fortune 500 companies in India. The two services that the company provides, work on different models. The CCR segment is a B2B2C business, where the customers are the corporate organization, and the end consumer is an employee, client, guest or visitor of the organization. In the ETS segment, the company offers customers with solutions to manage their employee home-office-home ground transportation. The company has a deep rooted and widespread footprint, which is highlighted by their comprehensive network, spread across 109 cities in India, spanning 21 states and 4 union territories. In FY24, the company made a total of 3,100,000 trips, average of 8,400+ trips per day through its CCR and ETS segments. The company also has an extensive global reach, servicing in over 30 countries. The company operates a fleet of more than 12,000 economy to luxury cars, mini vans, luxury coaches, etc. The company also provides specialty vehicles such as luggage vans, limousines, vintage cars and vehicles for accessible transportation for people with disability. The company operates its fleet on an asset light model, where the company strives to keep the number of vehicles they own in their fleet significantly lower than the vehicles which are sourced from its vendors. As of FY24, the company has successfully been able to reduce the number of vehicles they own, which is at 5.8% of all the vehicles they own, vs 10.5% in FY23. Out of the 109 cities where it operates, 97 cities are conducted through vendors. The company has integrated technology into their services by creating custom online booking tools and mobile applications for customers and chauffeurs. ECOS maintains a wide customer base, which consists of InterGlobe Aviation, HCL Corporation, Deloitte Consulting India, Urbanclap Technologies, IndusInd Bank, HDFC Life Insurance Company, etc.
Objective of the ECOS Mobility and Hospitality Ltd IPO
- The company will not receive any proceeds as 100% of the issue is Offer for Sale (OFS).
Rationale To Invest In ECOS Mobility and Hospitality Ltd IPO
Long-standing customer relationships and established brand presence through operational excellence
ECOS, through its two and half decades of operational experience, has been able to establish a sustaining and long-term relationship with customers across industries. The company has an average contract age of 3-4 years with its customers. The company also boasts a robust customer retention rate of 89.8%, highlighting the company’s ability to meet customer requirements consistently. Their vehicles are equipped with top-tier amenities and driven by professionally trained and verified chauffeurs. The company provides dedicated account managers as a single point of contact for all corporate mobility needs, supported by 24/7 customer care. Their commitment to high safety and hygiene standards, rigorous fleet quality checks, and seamless technology integration has strengthened their brand in the chauffeur-driven mobility sector. This high-quality service has established their brand with minimal advertising expenditure. The company also maintains healthy relationships with its vendors and can be primarily attributed to its timely payments, incentives, consistent business and opportunity to work with good customer profile. Owing to the operational efficiency of the company, their customers benefit from the dual offerings of CCR and ETS, which together provide a comprehensive solution for corporate transportation needs. CCR and ETS significantly benefit from targeting two distinct segments while sharing the same systems and administrative infrastructure.
Integrated technology ecosystem enabling operational superiority
The company is dedicated to achieving seamless integrations between its front-end applications and back-end systems. Their emphasis on proprietary technology has allowed them to better manage their service offerings and enhance operational efficiencies by integrating service functions, thereby ensuring accuracy, reliability, and promptness in their operations. The outsourced technology team follows a structured approach to innovation and problem-solving, which has contributed to their ability to build a large customer base, strengthen customer relationships, and enhance brand recognition. The outsourced technology team has developed a range of applications that the company utilizes, including: 1) Online Booking Tool: This customizable tool integrates with customers’ travel desks through an API connection, allowing them to manage their CCR requirements efficiently. It facilitates the smooth transition of reservation data, contactless booking management, and quick access to booking and billing information. 2) Chauffeur Mobile Application: Designed for chauffeurs, this application aids in booking management and provides trip and route information. It also allows the company to monitor chauffeur performance and ensure adherence to quality standards. 3) Customer Mobile Application: This app handles all customer needs, including managing bookings and displaying chauffeur details as soon as a booking is confirmed. 4) CabDrive Pro: A recently launched full-stack corporate car hire management system, CabDrive Pro integrates with customers’ mobile applications, chauffeurs’ applications, and the RentNet application, the company’s central transport management system. 5) RentNet Application: As an end-to-end transport management software, the RentNet application offers features such as live tracking through GPS, customizable solutions, and adjustments based on feedback and incidents. It manages reservations across all cities in India, while in ETS, a third-party technology approved by the client is used to execute trips. The corporate mobility industry is shifting towards a more organized market, with corporates favouring transparent billing, single vendors nationwide, quality services, and better pricing. With digitization offering improved efficiency, autonomy, and data-driven decision-making, the company is well-positioned to capitalize on these trends through technological advancements and secure customer applications.
Valuation of ECOS Mobility and Hospitality Ltd IPO
ECOS Mobility and Hospitality is primarily engaged in the business of providing CCR and ETS, catering to corporate clients, including Fortune 500 companies in India, for over 25 years. The CCR segment operates as a B2B2C business, serving corporate companies whose end consumers are their employees, visitors, or clients. Through the ETS segment, ECOS offers solutions for managing employee ground transportation. ECOS stands as the largest and most profitable chauffeur-driven mobility provider for corporates in India. ECOS’s strong client relationships and high retention rate of 89.8% underscore its reliability and market position. Their integrated technology, including the Online Booking Tool and RentNet Application, boosts service efficiency and client satisfaction. As the industry embraces digital solutions, ECOS is well-positioned to leverage its operational excellence and advanced technology for continued growth and leadership. The market growth in the CCR and ETS segment is driven by the transition from remote work to in-office work, rise in corporate travel, expansion of office spaces and development of tier-II and tier-III cities as more corporates are willing to set up their offices in these cities owing to lower building and rental cost, enhanced mobility efficiency and greater transparency with vendor. These trends are favorable for ECOS, as the company is well-prepared to capitalize on these opportunities. The company aims to strengthen its market position by expanding into tier-II and tier-III cities, enhancing penetration in existing markets, leveraging technology for operational efficiency, and expanding globally to capitalize on future growth opportunities. The company’s financials show robust growth over three fiscal years, with total revenue increasing from Rs. 1,473.4 million in FY22 to Rs. 5,544.1 million in FY24, reflecting a CAGR of approximately 94.0%. EBITDA and PAT also saw significant rise during FY2022-24 period, with CAGR of approximately 123.2% and 151.7%, respectively, to reach Rs. 899.6 million and Rs. 625.3 million . Due to the asset light model, the company is able to reduce the cost and liabilities associated with the ownership of fleets. ECOS’s strong customer and vendor relationships, established brand presence, robust financial performance, and advanced technological ecosystem position the company favorably to capitalize on industry tailwinds. On the upper price band, the issue is valued at a P/E of 32.1x based on FY24 earnings which we feel is fairly valued. We, thus, recommend a SUBSCRIBE rating to the issue from a medium to long term perspective.
What is the ECOS Mobility and Hospitality Ltd IPO?
ECO Mobility IPO is a book built issue of Rs 601.20 crores. The issue is entirely an offer for sale of 1.8 crore shares. ECO Mobility IPO opens for subscription on August 28, 2024 and closes on August 30, 2024. The allotment for the ECO Mobility IPO is expected to be finalized on Monday, September 2, 2024. ECO Mobility IPO will list on BSE, NSE with tentative listing date fixed as Wednesday, September 4, 2024.
How to apply for the ECOS Mobility and Hospitality Ltd IPO through Stoxbox?
To apply for the ECOS Mobility and Hospitality Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the ECOS Mobility and Hospitality Ltd IPO open?
ECOS Mobility and Hospitality Ltd IPO is opening on 28th August 2024
What is the lot size of the ECOS Mobility and Hospitality Ltd IPO?
The Lot Size of ECOS Mobility and Hospitality Ltd IPO is 44 equity shares
When is the ECOS Mobility and Hospitality Ltd IPO allotment date?
The allotment Date for ECOS Mobility and Hospitality Ltd IPO is 02nd September 2024
When is the ECOS Mobility and Hospitality Ltd IPO listing date?
The listing Date for ECOS Mobility and Hospitality Ltd IPO is 04th September 2024
What is the minimum investment required for the ECOS Mobility and Hospitality Ltd IPO?
In the Retail segment the minimum investment required is Rs. 14,696
What is the maximum investment allowed for the ECOS Mobility and Hospitality Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 191,048
What are the risks associated with investing in the ECOS Mobility and Hospitality Ltd IPO?
- The company is measured against high-quality service standards and governed by the terms and conditions of their contracts with customers. Any failure to comply with these standards or terms may lead to cancellation of existing and future bookings, adversely affecting company’s reputation, business operations, financial condition, and cash flows.
- The company’s business depends on its relationships with vendors who supply vehicles and chauffeurs to them, and any adverse changes in such relationships, or its inability to enter into new relationships, could adversely affect company’s business and results of operations.
- The company incurs significant expenditure towards its vendors and vehicle operation expenses. Any increase in factors affecting the pricing of the services provided by its vendors or cost of operating its vehicles may have an adverse impact on the company’s business, financial conditions and results of operations.
When will the ECOS Mobility and Hospitality Ltd IPO shares be credited to my Demat account?
The ECOS Mobility and Hospitality Ltd IPO be credited to the account on allotment date which is 03rd September 2024
Where can I find the ECOS Mobility and Hospitality Ltd IPO prospectus?
The prospectus of ECOS Mobility and Hospitality Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related toECOS Mobility and Hospitality Ltd IPO?
| IPO Open Date | Wednesday, August 28, 2024 |
|---|---|
| IPO Close Date | Friday, August 30, 2024 |
| Basis of Allotment | Monday, September 2, 2024 |
| Initiation of Refunds | Tuesday, September 3, 2024 |
| Credit of Shares to Demat | Tuesday, September 3, 2024 |
| Listing Date | Wednesday, September 4, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on August 30, 2024 |
