As ECOS Mobility gears up for its initial public offering (IPO), investors have a unique opportunity to tap into one of the most profitable provider of chauffeur-driven mobility services to corporates in India. Headquartered in New Delhi, the company offers chauffeured car rentals (CCR) and employee transportation services (ETR). This ECOS Mobility IPO Review covers key points every investor should know.
#1 ECOS Mobility IPO Review: Business Overview
Incorporated in 1996, ECOS Mobility is the largest and most profitable provider of chauffeur-driven mobility services in India, the company’s services extend across 21 states and four union territories. In Fiscal 2023, ECOS Mobility catered to the CCR and ETS needs of over 750 corporate customers, completing more than 2,100,000 trips, averaging over 5,700 trips per day. Additionally, the company offers self-drive cars in Delhi, Gurugram, Mumbai, and Bengaluru.
#2 ECOS Mobility IPO Review: Products & Solutions Portfolio
ECOS Mobility stands out for its services in corporate employee transportation, it offers chauffeured car rentals and employee transportation services:
- Chauffeured Car Rentals (CCR): The company offers economy to luxury cars, minivans, and luxury coaches with professionally trained chauffeurs to its customers through this segment. It also serves travel and tourism companies, exhibition and conference organizers with a diverse range of vehicles. Customer retention is pretty high in this segment which reduces the cost of marketing and customer acquisition and generates a high lifetime value. This segment contributed 43.29% in company’s overall revenue as of FY 2024.
- Employee Transportation Services (ETS): Through this segment, ECOS Mobility offers customers solutions to manage their employee ground transportation. It provides ETS in 10 cities in India such as Bengaluru, Gurugram, Mumbai, Hyderabad, Pune, Noida, Chennai, Kolkata, Ahmedabad, and Jaipur. This segment caters to the daily home-office-home transportation requirements of employees of its corporate customers. ETS contribution in the company’s overall revenue is around 54.71% as of FY 2024.
#3 ECOS Mobility IPO Review: Industry Growth
The global corporate mobility market (including ETS and CCR) is poised for steady growth at a projected CAGR of 9.6% from 2023 to 2030. India is poised to lead the global corporate mobility market in terms of growth with a projected CAGR of 10.7% from 2023 to 2030. The ETS market is expected to grow at an even faster rate of 11.8% to reach USD 13.2 billion in revenue in 2030. The CCR market is expected to grow at a CAGR of 9.3% to reach annual revenue of USD 8.8 billion by 2030. This represents a huge untapped and fragmented market and offers unique advantage to organized players like ECOS Mobility.
#4 ECOS Mobility IPO Review: Offer Details
ECOS Mobility IPO is scheduled for 28 to 30 August 2024, and shares are scheduled to make debut on the BSE, and NSE on Wednesday, 4 September 2024. The public issue consists of an Offer for Sale (OFS) of 18,000,000 shares priced around INR 318 – 334 per share amounting to INR 601.20 crore. Retail investors will be allotted 35% of the shares. ECOS Mobility will not directly receive any proceeds from the offer, all the proceeds will be received by the selling shareholders.
#5 ECOS Mobility IPO Review: Expansion
ECOS Mobility has strategically positioned itself through its comprehensive geographical presence across India. It intends to focus on expanding its presence globally by identifying key markets and industry segments with high demand, high growth potential, and strong purchasing power and prioritizing those markets. Over the years, ECOS Mobility has been significantly increasing its presence in tier-II and tier-III cities in India through its vendors.
As well as its long-standing relations with customers position it well to increase revenue from existing customers and to continue focusing on expanding the customer base.
#6 ECOS Mobility IPO Review: Impressive Financial Performance
ECOS Mobility has demonstrated consistent financial growth, with revenue from operations increasing at a compound annual growth rate (CAGR) of 55.54% from FY 2022 to FY 2024. This impressive growth trajectory highlights the company’s ability to expand its customer base, contributing to robust financial health. Bottomline growth has been even higher and has expanded from INR 9.77 crore in FY 2022 to INR 62.53 crore in FY 2024.
| FY 2022 | FY 2023 | FY 2024 | |
| Revenue | 147.34 | 422.68 | 554.41 |
| Expenses | 138.57 | 367.14 | 485.89 |
| Net income | 9.77 | 43.56 | 62.53 |
| Margin (%) | 6.63 | 10.30 | 11.29 |
#7 ECOS Mobility IPO Review: Valuation
ECOS Mobility’s earnings per share (EPS) has consistently risen over 3 years from INR 1.63 in FY 2022 to INR 10.42 in FY 2024, along with rise on return on net worth (RONW) to 42.75% which is highest among its listed peers. ECOS IPO GMP of INR 160 per share, roughly 48% of the offer price indicate towards high chances of a fantastic listing.
| FY 2022 | FY 2023 | FY 2024 | |
| EPS | 1.63 | 7.26 | 10.42 |
| RONW (%) | 14.80 | 46.70 | 42.75 |
| NAV | 11.93 | 19.19 | 29.07 |
| ROCE (%) | 19.07 | 40.90 | 42.88 |
| EBITDA (%) | 12.25 | 16.50 | 16.23 |
| Debt/Equity | 0.05 | 0.29 | 0.12 |
#8 ECOS Mobility IPO Analysis: Robust Customer Base
ECOS Mobility provides services to customers operating in a wide range of industries including information technology (IT), business process outsourcing (BPO), consultancy, healthcare, e-commerce, and manufacturing. In Fiscal 2023, the company serviced the requirements of more than 750 corporate customers in India. This included 42 Fortune 500 companies and 60 BSE 500 companies, among others as of FY 2024. Its largest customer contribute around 6.39%, and top 25 customers contribute 53.42% to the overall revenue as of FY 2024.
#9 ECOS Mobility IPO Review: Risk Factors
- ECOS Mobility is engaged in the business of providing chauffeured car rentals and employee transportation services, this nature of services requires high-quality standards and any compromise with these standards can impact the company in the long run.
- Its business depends on the company’s relationships with vendors who supply vehicles and chauffeurs to it, as some vendors may be increasingly focused on driving demand to their own business and may cease to supply it with the same level of access to cars in the future as vendors continue to use alternative distribution channels, such as direct distribution, its ability to renegotiate the contractual arrangements with them will be adversely affected and may lead to a decline in ECOS’s revenue from operations.
- ECOS Mobility derives a significant part of its revenue from some customers, with whom the company does not have long-term contracts. Although it will continue to be reliant on its major customers for the foreseeable future, any failure to retain these customers could affect the company’s business, financial condition, and results of operations.
- Any downturn in Global capability centers (GCC) would create an adverse impact on revenue from customers as its ETS business is heavily dependent on GCCs, contributing about 66.63% as of FY 2024.
Conclusion
ECOS Mobility IPO offers investors a chance to participate in the growth story of a dynamic chauffeur-driven mobility services provider. With its product portfolio and strong financial performance, the company is well-positioned to thrive in the competitive sector. As it expands its geographical reach and continues to innovate, ECOS Mobility presents a promising prospect for investors seeking exposure to the technology sector’s rapid evolution.
