Enviro Infra Engineers IPO: Unlisted shares of Enviro Infra Engineers Ltd are currently trading in the gray market at Rs. 200 per share which is trading at Rs. 52 or Rs. 148 is 35.14 percent higher than the IPO issue price.
The Enviro Infra Engineers IPO, which opened for public subscription on Friday, has received decent subscription so far. Monday till 11:55 am on the next day of subscription, Rs. 650.43 crore IPO received oversubscription of 5.97 times for 18,37,49,704 shares against 3,07,93,600 shares on offer.
Enviro Infra Engineers is involved in the development of turnkey projects of sewage treatment plants and sewage systems.
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So far, the Non-Institutional Investors portion has been subscribed 14.41 times while the Qualified Institutional Buyers (QIBs) portion has been subscribed 2.05 times. The category for retail individual investors (RIIs) received 4.57 times subscription.
The price band of the IPO has been fixed in the range of Rs 140-148.
Enviro Infra Engineers IPO GMP today
According to market watchers, the unlisted shares of Enviro Infra Engineers Ltd are currently trading at Rs per share in the gray market. 200 which is trading at Rs. 148 over the IPO issue price of Rs. 52 or 35.14 percent is more. 35.14% GMP shows an overwhelming value. Listing benefits. The listing of the IPO is scheduled to take place on November 29.
GMP is dependent on market sentiments and is subject to change. The ‘grey market premium’ represents the willingness of investors to pay more than the issue price.
Enviro Infra Engineers IPO: Should You Apply?
Most analysts recommended a ‘subscribe’ rating to the IPO based on its comfortable valuation relative to its listed peers.
Geojit Financial Services in its report said, “EIEL (Enviro Infra Engineers Ltd) order book in FY23 was Rs. 1,496.7 crore in FY24 to Rs. 2,125.6 crores. Company in June 2024 Rs. 1,906.3 crore maintained an order book. The order book to sales ratio for FY24 was 2.6x, which provides revenue visibility for the next 2 to 3 years.”
Rs. At an upper price band of 148, EIEL is available at a P/E of 23.9x (FY24), which seems reasonably priced compared to listed peers. Ambitious initiatives of the Government of India, such as Jal Jeevan Mission-Har Ghar Jal, AMRUT, Namami Gange Program and Swajal, present significant opportunities for the company’s future growth. With a strong order pipeline and consistent financial performance showing industry-leading margins, the company is well positioned for future success.
“We recommend ‘Subscribe’ rating for the issue for medium to long-term investment,” Geojit said.
Another brokerage, Anand Rathi, said in its IPO note that the company has a pan-India exposure of Rs. An in-house designing, engineering and execution team of 180 engineers with a diverse order book of 21 projects with a total value of 19,062.8 million and in-house execution capabilities with on-time delivery and an established track record can continuously enhance the eligibility of advanced technologies in the construction and installation of WWTPs and WSSPs. For high value project tenders with use.
“At the upper price band the company is valuing at a P/E of 30.72x, with an EV/EBITDA of 15.8x and a market cap of ₹25,996 million post issue equity shares and return on net worth of 37.83%. We believe the IPO is reasonably priced and recommend a ‘Subscribe-Long-Term’ rating to the IPO,” he added.
In its IPO note, brokerage firm Bajaj Broking said that in terms of financial performance, in the past two financial years, the company in FY22 posted Rs. 225.62 crore and Rs. 34.55 crore, Rs. 341.66 crore and Rs. 55.34 crores achieved a consolidated gross revenue and net profit. In FY23, and Rs. 738.00 crore and Rs. 108.57 crore in FY24.
“In the first quarter of FY25, ended June 30, 2024, the company reported a net profit of Rs. 29.97 crore gross revenue of Rs. 207.46 crore, representing a significant increase in both revenue and profit from FY24,” Bajaj Broking said.
Over the past three financial years, the company has maintained an average EPS of Rs. 5.95 and average RoNW 41.44%. The issue price is set at a P/BV of 6.27 based on a NAV of Rs. Rs. 51.01 per share (on the upper cap), it added.
Enviro Infra Engineers IPO: More details
Rs. 650.43 crore IPO is a combination of fresh issue of 3.87 crore equity shares and offer for sale (OFS) of 52.68 lakh shares by the promoters. Ahead of the IPO, Enviro Infra Engineers raised around Rs. 195 crore was collected.
Currently, the promoters hold more than 93 percent stake in Enviro Infra Engineers.
The company raised Rs. 181 crore plan to use proceeds to meet working capital requirements, Rs. 100 crore will be used for debt repayment, Rs. 30 crore will be put into the company’s subsidiary, EIEL Mathura Infra. Engineers will construct a 60 million liter per day Sewage Treatment Plant (STP) at Mathura, Uttar Pradesh. In addition, a portion will be used for general corporate purposes.
Enviro Infra Engineers are engaged in the design, construction, operation and maintenance of water and wastewater treatment plants and water supply scheme projects for government authorities/organizations.
The treatment process installed by the company at most of the STPs is zero liquid discharge-compliant and the treated water can be used for horticulture, washing, refrigeration and other process industries.
Hamm Securities is the sole book-running lead manager of the public issue.