eMudhra to exit global SSL/TLS business, shares tank

BENGALURU: Shares of digital trust company eMudhra plunged 20% on BSE for the second consecutive day on Thursday after it announced its decision to exit the global SSL/TLS (Secure Sockets Layer/Transport Layer Security) certificate business following a security incident involving eight of its intermediate certificate authorities.The company’s board decided to withdraw from the business after reviewing its commercial prospects and the scrutiny triggered by the incident. The global SSL/TLS business contributes about 1% of eMudhra’s revenue, but rising compliance requirements, increasing costs and competition from free certificate providers have reduced its potential returns, the company said.“The scrutiny was disproportionate to the revenue contribution of the business,” Kaushik Srinivasan, co-founder of eMudhra, told TOI, explaining the board’s decision. He said the board met on Thursday to assess the business’s future following the incident and the sharp fall in the company’s share price over the past two sessions.Investors were bearish on the eMudhra stock after the cyber incident. In two sessions since the incident, its stock price has crashed 36% to Rs 345 by Thursday’s close, from Rs 539 at Monday’s close.The issue was reported on Oct 17 by Dennis Jackson, a member of Mozilla’s cryptography engineering team, who flagged weaknesses in the keys associated with the eight eMudhra intermediate certificates.Srinivasan said the economics of the business were becoming less attractive as certificate validity periods shortened. “The return on investment, considering the effort, investment and compliance requirements, is becoming less attractive. It makes more sense to strengthen and invest in our enterprise solutions business, which has higher margins and greater potential,” he said.