Ecos Mobility offers exposure to fast growing car rental business in the country

economictimes.indiatimes.com:

IPO Details

Issue Dates: August 28-30
Issue Price: ₹318-334 per share
Issue Size: Upto Rs 601 crore

Implied Market Cap: Upto Rs 2,004 crore
Face Value: Rs 2
Lot Size: 44 shares
Retail Portion: 35% of the net issue

Ecos (India) Mobility and Hospitality, a provider of corporate car rental services, plans to raise ₹601 crore through an offer for sale by promoters, which will reduce their stake from 98% to 68%. The company has access to over 12,500 vehicles, ranging from economy to luxury cars, but only 6% of the fleet is owned by the company. This asset-light business model supports high Return on Equity (RoE). The growing share of the organized market for employee transportation services driven by the expansion of global capability centers (GCCs) augurs well for the company. Given these factors, investors may consider the IPO.

Business

Founded in 1996, New Delhi-based Ecos Mobility operates in two segments: Employee Transportation Services (ETS), which contributes two-third to the revenue and the rest is from Chauffeur Car Rentals (CCR). The company provides services across 109 cities in India, although nearly 60% of the revenue comes from four metro cities: Bengaluru, Gurugram, Mumbai, and Hyderabad. The company's clients include InterGlobe Aviation, HCL Corp, Safexpress, Deloitte, IndusInd Bank, and HDFC Life Insurance. Over 57% of the clients have been with the company for more than five years. The combined market size for ETS and CCR in India is approximately Rs 1 lakh crore, with organized players capturing 15%