The initial public offering (IPO) of Enviro Infra Engineers continued to attract a strong response from investors during the third and final of bidding process, thanks to HNI investors. The issue was overall subscribed more than 2 times on day one, while it ended the second day with over 12.5 times subscription.
The New-Delhi-based Enviro Infra Engineers is selling its shares in the price band of Rs 140-148 apiece. Investors can apply for a minimum of 101 shares and its multiples thereafter. It is looking to raise Rs 650.30 crore via IPO, which includes a fresh share sale of Rs 572.46 crore, and an offer-for-sale (OFS) of up to 52.68 lakh equity shares.
According to the data, the investors made bids for 1,10,36,66,693 equity shares, or 35.84 times, compared to the 3,07,93,600 equity shares offered for the subscription by 1.45 pm on Tuesday, November 26. The three-day bidding for the issue, which opened on Friday, November 22, concludes today.
The allocation for non-institutional investors (NIIs) was subscribed 106.19 times, while the portion reserved for retail investors saw a subscription of 17.84 times. The allocated amount for employees was booked over 28.28 times. However, the quota set aside for qualified institutional bidders (QIBs) was subscribed 14.67 times as of the same time.
Established in 2009, Delhi-based Enviro Infra Engineers is engaged in the design, construction, operation, and maintenance of water and waste-water treatment plants (WWTPs) and water supply projects (WSSPs) for government agencies/entities.
The grey market premium of Enviro Infra Engineers has seen some correction despite the strong bidding for the issue. Last heard, the company was commanding a premium of Rs 45-50 per share in the unofficial market, suggesting a listing pop of around 30 per cent for the investors. The GMP stood around Rs 50-55 on the previous day.
Brokerages are mostly positive on the issue, suggesting investors to subscribe to it citing the strong financials, robust & diversified order book, reasonable valuations, experience promoters and consistent execution are the key positives of the company. However, dependence on government tenders, capital intensive nature of business and rising competition are the major risks for it.
The ambitious initiatives of the Indian government, present significant opportunities for the company's future growth. With a robust order pipeline and consistent financial performance featuring industry-leading margins, the company is well-positioned for future success, said Geojit Financial Services.
"The order book to sales ratio for FY24 stood at 2.6 times, providing revenue visibility for the next 2 to 3 years. At the upper price band, EIEL is available at a P/E of 23.9 times, which appears to be fairly priced compared to listed peers. We recommend 'subscribe' rating for the issue for medium- to long-term investment," it said.
Ahead of its IPO, Enviro Infra raised Rs 194.7 crore from anchor investors as it allocated 1.31 crore equity shares at Rs 148 apiece. For the period ended on June 30, 2024, Enviro Infra Engineers reported a net profit of Rs 30.78 crore with a revenue of Rs 207.46 crore. It clocked a net profit of Rs 110.54 crore with a revenue of Rs 738 crore for the financial year ended in March 31, 2024.
Enviro Infra Engineers has reserved 1,00,000 equity shares for its eligible employees who will get a discount of Rs 13 per share during the bidding. Of the net offer, 50 per cent shares are reserved for qualified institutional bidders (QIBs), while non-institutional investors (NIIs) have 15 per cent of allocation. Retail investors will get an allocation of 35 per cent in the net offer.
The current issue is priced at a P/E of 18.2 times on the upper band, based on FY24 earnings, which is relatively lower than its peers. Given the company’s strong technological capabilities and its focus on growth strategies such as geographical expansion and waste-to-energy initiatives, the company is well-positioned for continued business traction, said StoxBox with 'subscribe' tag.
Enviro Infra participates in tenders floated by state governments and ULBs for developing WWTPs and WSSPs on an EPC or HAM basis. Till June 30, 2024, the Company has successfully developed 28 WWTPs and WSSPs across India in the last seven years, including 22 projects of 10 MLD capacity and above, said Bajaj Broking with a 'subscribe' for long term.
Hem Securities is the sole book running lead manager of the Enviro Infra Engineers IPO, while Bigshare Services is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with Friday, November 29 as the tentative date of listing.