Enviro Infra Engineers IPO: Public Issue Subscribed 36x On Day 3, GMP Hints Premium Listing; Check Dates

The initial public offering (IPO) of Enviro Infra Engineers Limited is witnessing strong investor interest as it enters the final day of bidding today, November 26, 2024. Opened on November 22, the IPO has garnered attention due to its promising business model, financial growth, and robust grey market performance.

Grey Market Premium (GMP)

Enviro Infra Engineers' shares are trading at a grey market premium (GMP) of Rs 55 today, marking a Rs 2 increase from the previous day's GMP of Rs 53. Over the past five days, the GMP has surged from Rs 23 to Rs 55. Market observers attribute this to a combination of a trend reversal in the Indian stock market and strong subscription numbers for the IPO.

IPO Subscription Status

As of 1:50 PM on Day 3, the IPO has been oversubscribed by 36.10 times. The retail portion subscribed 18.02 times, Non-Institutional Investors (NIIs) subscribed 106.93 times, and Qualified Institutional Buyers (QIBs) subscribed 14.71 times.

IPO Details and Structure

The IPO consists of a fresh issue of 3.87 crore equity shares and an offer-for-sale (OFS) of 52.68 lakh shares by promoters, collectively valued at Rs 638.86 crore at the upper price band.
Price Band: Rs 140 to Rs 148 per equity share
Lot Size: 101 shares, with further bids in multiples of 101
Employee Reservation: 1,00,000 equity shares at a discounted price of Rs 135 per share

Allocation for the IPO is structured as follows

50% reserved for QIBs
15% for NIIs
35% for Retail Investors

IPO Timeline

Allotment Date: November 27
Refunds Initiated: November 27
Demat Credits: November 28
Listing Date: November 29 (on BSE and NSE)

Business Model and Strengths

Established in 2009, Enviro Infra Engineers specializes in designing, constructing, operating, and maintaining water and wastewater treatment plants (WWTPs) and water supply schemes (WSSPs). The company executes projects primarily through Engineering, Procurement, and Construction (EPC) and Hybrid Annuity Model (HAM) frameworks, working extensively with state governments and urban local bodies.

Enviro Infra has completed 28 WWTPs and WSSPs to date, with 22 projects boasting capacities of 10 million litres per day (MLD) or more. As of June 30, 2024, its order book stands at Rs 1,906.28 crore, encompassing 21 ongoing projects.

Financial Performance

Enviro Infra Engineers has showcased remarkable growth over the last three fiscal years:
FY22: Revenue of Rs 225.62 crore; net profit of Rs 34.55 crore
FY23: Revenue surged to Rs 341.66 crore; net profit rose to Rs 55.34 crore
FY24: Revenue jumped to Rs 738 crore; net profit more than doubled to Rs 108.57 crore
The momentum continued in Q1FY25, ending June 30, 2024, with revenue of Rs 207.46 crore and net profit of Rs 29.97 crore.

Utilization of IPO Proceeds

Proceeds from the fresh issuance will be allocated towards working capital requirements, supporting its subsidiary, EIEL Mathura, in constructing a 60 MLD sewage treatment plant for the Mathura Sewerage Scheme, debt repayment, and potential acquisitions and general corporate purposes.

Industry Position and Competitors

Enviro Infra Engineers operates in a competitive landscape alongside players like EMS Ltd (P/E: 25.92), ION Exchange Ltd (P/E: 38.68), Va Tech Wabag Ltd (P/E: 43.90), and Vishnu Prakash R Punglia Ltd (P/E: 25.31). With its strong order book, steady financials, and proven expertise, Enviro Infra Engineers is well-positioned to capture a larger market share in the water and wastewater treatment sector.

Promoter Shareholding

The company's promoters - Sanjay Jain, Manish Jain, Ritu Jain, and Shachi Jain - currently hold 99.97% of the equity. Post-IPO, their shareholding will dilute but remain significant, ensuring continued involvement in the company's strategic direction.