ECOS (India) Mobility and Hospitality IPO: Five key things to know ahead of August 28 launch

The initial public offering (IPO) of ECOS (India) Mobility and Hospitality Ltd, which operates under the brand name ECOS India Mobility, will open for subscription next Wednesday, August 28.

The mainboard IPO announced the price band for its primary issue on Friday, August 23.

If you are considering subscribing to shares of the company through its primary issue, here are the five important details you should know about ECOS India Mobility:

ECOS India Mobility IPO offer size and price band

The Ecos India Mobility IPO is a 100% book-built issue worth ₹601.20 crore. It is completely an offer-for-sale (OFS) of 1.8 crore shares of a face value of ₹2 each.

ECOS India Mobility IPO price band has been fixed at ₹318 to ₹334 per share. For retail investors, the minimum bid quantity, or lot size, is 44 shares.

The bidding will open on August 28 and close on August 30. Share allotment status is expected to be finalised on September 2. The ECOS India Mobility stock is expected to be listed on the BSE and NSE on September 4.

ECOS India Mobility business model and competitors

Started in 1996, ECOS (India) Mobility and Hospitality is the largest and most profitable chauffeur-driven mobility provider, mainly to corporates in India, in terms of revenue from operations and profit after tax (PAT) for fiscal 2023.

The company is primarily engaged in providing chauffeured car rentals (CCR) and employee transportation services (ETS). It caters to corporate customers, including Fortune 500 companies, individuals, travel and tourism companies, hotels, and government bodies. It also offers self-driven cars in Delhi, Gurugram, Mumbai, and Bengaluru.

As of March 2024, the company was operating in 109 cities using its own vehicles and vendors. It was spread across 21 states and four union territories. ECOS India Mobility operates a fleet of more than 9,000 economy cars to luxury cars, minivans and luxury coaches.

ECOS India Mobility admits that it operates in a competitive industry that experiences rapid changes in customer requirements. The chauffeur-driven mobility services industry is highly competitive and fragmented, with well-established and low-cost alternatives that have been available for decades.

Its competitors include a variety of companies ranging from large multinational corporations to small, local businesses in various geographic markets.

The company says that the organised sector comprises 15% of the market share and in the unorganised sector holds 85% of the market share of the total ETS market in India. Further, the organised sector holds 25% of the CCR market in India and the unorganised sector accounts for 75%. Such a large percentage of the unorganised sector poses a risk in terms of inconsistencies with service quality, scalability challenges and limited bargaining power with corporate clients.

ECOS India Mobility IPO promoters

The promoter and promoter group’s collective shareholding in ECOS India Mobility should fall to 67.75% after the OFS from the current 97.75%.

Promoters Rajesh Loomba and Aditya Loomba currently own 48.76% and 38.99% of the company, respectively. Under the OFS, Rajesh Loomba and Aditya Loomba will divest up to 99 lakh and 81 lakh equity shares, respectively.

After the offer (if it is fully subscribed), Rajesh Loomba’s holding will come down to 32.26%, while Aditya Loomba’s holding will fall to 25.49%.

ECOS India Mobility key financials

The company’s revenue from operations jumped 31% to ₹554 crore in FY24 compared to ₹422 crore in FY23. Its net profit increased 43% during the fiscal to ₹62.5 crore as against ₹43.5 crore in FY23.

ECOS India Mobility IPO purpose

Since it’s an OFS, the selling shareholders will be entitled to the entire proceeds of the offer after deducting the offer expenses and relevant taxes thereon. The company will not receive any proceeds from the offer.

However, ECOS India Mobility said that it expects the listing of the equity shares to enhance its visibility and brand image and provide liquidity to its shareholders