I agree. Mr Market’s valuation seems low to me but Mr Market is...

I agree.
Mr Market’s valuation seems low to me but Mr Market is probably being swayed by the folk who have been badly burned by EHL in the past. I was one of them!
Back in 2017, after EHL had been rescued from the brink by private equity vultures, EHL raised a bunch of money via a rights issue.
Much the same thing happened as now, except that back then the entitlement shares were way out of the money.

If memory serves, the issue price was 10.9 cents.
The private equity vultures all gave notice that they would be taking up their entitlements at 10.9 cents, while the shares were trading on the market at about 8 cents.
At the time, I can remember one Hot Copper poster exclaiming, "EHL, you lazy sack of $hit !!!".

I thought that the vultures were in the best position to know what EHL was worth, so I tentatively bought some on the market.
I should have backed up a dump truck, but I was worried that I must be missing something.
It wasn’t all that long before EHL got to 40 cents,

That was all prior to the 10 to 1 consolidation.
So, back then, the private equity vultures were ponying up cash or swapping debt, at the equivalent of $0.47 per share (allowing for dilution), at a time when EHL was a far riskier proposition than it is now.
Back then the book value was minus $0.13, now it’s plus $0.93
Back then the earnings were minus $0.54, now it’s plus $0.22
Back then the cash flow was $0.13, now it’s $0.51

I wondered whether the current underwriters might be suppressing the price to make sure that they collect all the fees that are on offer.
Although as the price seems to be drifting up again before the close of the retail entitlement, that explanation seems less likely.
Below is what it says in the prospectus about the underwriting fees.
What is a selling fee and in what circumstances do they get it?

“The Underwriters will be paid, in relation to the Entitlement Offer:an underwriting fee of 1.85% of the gross proceeds of the Entitlement Offer; anda selling fee of 0.35% of the gross proceeds of the Entitlement Offer.The Underwriters will also be reimbursed for certain expenses.”

There is probably a cohort in the market who are still very grumpy about having done their doh in EHL back when it effectively went bust and was rescued by the vultures.
I hope your assessment is correct because I now have a bunch of EHL shares.

Cheers