The GMP, in the lead up to the listing is around Rs 49, which is a premium of 33% over the issue price. However, analysts see a much lesser listing premium in the range of 15-25%. “The stock can list with a healthy listing gain around 15-25% range on its issue price,” said Prashanth Tapse of Mehta Equities.
The IPO of Enviro Infra Engineers received a robust subscription of nearly 90 times, thanks to heavy bidding from institutional and non-institutional investors. This was mainly due to reasonable valuations along with growing importance of water and wastewater infrastructure in the country.
Post the listing, for investors who received the allotment, analysts said they can book profits if the premium is over 25%. This is due to current market volatility.
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Meanwhile, long term investors can stick to their investments in the company and those who didn’t get the allotment can look to buy, if there are dips after the listing.
The company proposes to utilise net proceeds from fresh issue towards working capital requirements, infusion of funds in subsidiary, EIEL Mathura Infra Engineers to build 60 MLD STP under project titled Mathura Sewerage Scheme and repayment of debt.
Enviro Infra is in the business of designing, construction, operation and maintenance of water and wastewater treatment plants (WWTPs) and water supply scheme projects (WSSPs) for government authorities/bodies.
WWTPs include sewage treatment plants (STPs), sewerage schemes (SS) and common effluent treatment plants (CETPs) while WSSPs include water treatment plants (WTPs) along with pumping stations and laying of pipelines for supply of water.
The company’s financials have seen a multi fold increase in revenue from Rs 224 crore in FY22 to 729 crore in FY24 which grew by a CAGR of 80.6% while EBITDA and profit also grew in the same range as there was some bout of borrowings with increased in the order book from Rs 170 crore to Rs 2126 crore in the same period.
Over the last three fiscal years, the company has maintained an average EPS of Rs. 5.95 and an average RoNW of 41.44%.
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