Antony Waste Handling Cell IPO in progress: Should you subscribe to the share sale?

Antony Waste Handling Cell has launched its initial public offer (IPO) today.  The firm plans to raise Rs 300 crore through the IPO.  It has already raised Rs 90 crore from anchor investors ahead of its initial share sale. The company allotted 2,857,003 equity shares at Rs 315 apiece to 10 anchor investors to raise Rs 89.99 crore, The share sale will close on December 23.  

Price band for the IPO has been fixed at Rs 313-315 per share. This the second time this year, the firm is knocking on the doors of primary market. It had withdrawn its IPO in March this year due to adverse market conditions arising out of the coronavirus pandemic.  Price band for the share sale was fixed at Rs 295- 300 per share at that time.

The IPO comprises fresh issue of shares worth Rs 85 crore and an offer for sale of 68,24,993 equity shares by existing shareholders.

Tonbridge (Mauritius) Ltd, Leeds (Mauritius) Ltd, Cambridge (Mauritius) Ltd, and Guildford (Mauritius) Ltd will sell shares through the offer for sale.

Antony Waste Handling Cell IPO opens today: 10 things to know

Proceeds of the issue will be utilised for part financing a waste-to-energy project at Pimpri Chinchwad through investment in subsidiaries, reduction of consolidated borrowings of the company and general corporate purposes. Equirus Capital and IIFL Securities are the book running lead managers to the issue.

The equity shares are proposed to be listed on BSE and NSE. Shares are available in the IPO in a lot size 47 equity shares and in multiples of 47 equity shares thereafter, for Rs 14,805.

Analysts have a subscribe call on the issue but with cautious approach. Here's a look at what brokerages and analysts said about the share sale.

Geojit: Subscribe

At the upper price band of Rs.315, Antony Waste Handling Cell is available at P/E of 15 times on FY21E EPS. Valuation looks attractive, considering healthy margins, improving revenue generation and increasing relevance of waste management. Hence, we recommend 'SUBSCRIBE' to the issue with a long-term perspective.

Angel Broking: Neutral

Valuing the business at a P/E of 11.5 times on FY20 basis, Keshav Lahoti Associate Equity Analyst, Angel Broking has a 'Neutral' rating for the IPO. "For Antony Waste Handling Cell to grow its business it needs to win new contracts from municipalities. The top 5 clients contributed 81.8% of the revenue of the fiscal year 2020. So in the future if a company is not able to win an existing major contract again, it will impact the financials adversely," he said.

Tips2Trade: Subscribe

Antony Waste Handling IPO has been priced quite attractively with a PE of barely 10. With consistent growth in revenue and profits coupled with strong entry barriers in the sector and renewed focus on cleanliness & waste management, investors are advised to subscribe for the IPO & hold from a long term perspective,  Abhijeet Ramachandran, Independent Analyst/ Co-Founder & Trainer, Tips2Trade.

Choice Broking: Subscribe with caution

There are on listed peers having similar business operations like Antony Waste. We  have  taken  global  peers  for valuation  benchmarking.  At the  higher end of price  band, the company's share  is   valued at a   P/E  multiple of  26.1x  (to its restated TTM EPS of Rs. 12.1), which is at a discount to the peer average of 32.7x.

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