Enviro Infra Engineers IPO: Comprehensive Overview

Enviro Infra Engineers IPO is set to open for subscription on Friday, November 22, 2024, presenting an opportunity for investors to participate in the shares of a company specializing in water and wastewater infrastructure projects. Established in 2009, Enviro Infra Engineers Limited has made a significant mark in designing, building, operating, and maintaining Water and Waste-Water Treatment Plants (WWTPs) and Water Supply Projects (WSSPs) for government agencies and urban local bodies (ULBs).

With a robust track record and a promising financial trajectory, the IPO has garnered attention from retail and institutional investors alike. Here’s a detailed breakdown of the IPO and the company’s financial and operational highlights.

Company Background

Enviro Infra Engineers Limited is a leading player in the water infrastructure sector, primarily serving government entities. The company undertakes projects on Engineering, Procurement, and Construction (EPC) or Hybrid Annuity Model (HAM) contracts, focusing on sustainable and efficient water management solutions.

As of June 30, 2024, the company has successfully executed 28 WWTPs and WSSPs, including 22 projects with a capacity of 10 MLD or more. These projects underline the company’s capability to handle large-scale infrastructure initiatives.

Currently, Enviro Infra Engineers’ order book boasts 21 projects worth ₹1,90,628.06 lakhs, reflecting its strong market presence and consistent demand for its services.

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IPO Details

Key Dates

• IPO Opening Date: November 22, 2024
• IPO Closing Date: November 26, 2024
• Anchor Investor Allocation Date: November 21, 2024
• Allotment Finalization Date: November 27, 2024
• Listing Date: November 29, 2024

IPO Size and Price Band

• Price Band: ₹140 to ₹148 per equity share (Face Value: ₹10 each)
• Lot Size: 101 equity shares (minimum application)
• Total Issue:
  • Fresh Issue: 3.87 crore equity shares
  • Offer for Sale: 52.68 lakh equity shares

IPO Reservation

• Qualified Institutional Buyers (QIB): Up to 50%
• Non-Institutional Investors (NII): At least 15%
• Retail Investors: At least 35%
• Employee Reservation: Up to 1,00,000 equity shares (with a ₹13 per share discount for eligible employees)

IPO Objectives

The funds raised through the fresh issue will be utilized for:

1. Working Capital Requirements: Ensuring smooth operational flow and project execution.
2. Subsidiary Support: Financing its subsidiary, EIEL Mathura, for constructing a 60 MLD STP under the Mathura Sewerage Scheme.
3. Debt Repayment: Reducing the existing debt burden of ₹305 crore as of June 30, 2024.
4. Growth Initiatives: Supporting acquisitions and enabling corporate expansion.
5. General Corporate Purposes: Facilitating the company’s operational flexibility and resilience.

Financial Highlights

Enviro Infra Engineers has demonstrated consistent growth over the last three fiscal years, showcasing its operational efficiency and market relevance.

Fiscal Year	Revenue (₹ Cr)	Net Profit (₹ Cr)
FY22	225.62	34.55
FY23	341.66	55.34
FY24	738.00	108.57
Q1 FY25 (June 2024)	207.46	29.97

The company’s growth trajectory is evident, with a notable 327% revenue increase between FY22 and FY24 and corresponding profit growth.

Competitive Landscape

Enviro Infra Engineers operates in a competitive market, with listed peers such as:

• EMS Ltd: P/E ratio of 25.92
• ION Exchange Ltd: P/E ratio of 38.68
• Va Tech Wabag Ltd: P/E ratio of 43.90
• Vishnu Prakash R Punglia Ltd: P/E ratio of 25.31

Despite the competition, Enviro Infra Engineers’ focus on sustainable water management and strong government ties gives it a unique advantage.

Grey Market Premium (GMP)

The grey market premium (GMP) for Enviro Infra Engineers IPO currently stands at ₹31 as of November 20, 2024. This indicates strong demand, with the expected listing price at ₹179, reflecting a 20.95% premium over the upper price band.

Key Strengths

1. Expertise in Large-Scale Projects: The company has a proven track record in executing large and complex projects.
2. Strong Order Book: Projects worth ₹1,90,628.06 lakhs provide revenue visibility for the coming years.
3. Sustainable Focus: Emphasis on water conservation and management aligns with global sustainability goals.
4. Prominent Promoters: The Jain family holds 99.97% pre-IPO equity, showcasing strong promoter backing.

Investment Review

According to market analysts, Enviro Infra Engineers IPO is fairly priced with a post-IPO P/E ratio of 21.67 (FY25) and 23.90 (FY24). While the debt levels are a concern, the company’s growth prospects, strong order book, and robust financial performance make it a promising investment for the long term.

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Conclusion

Enviro Infra Engineers Limited has positioned itself as a leader in the water infrastructure sector with a focus on government projects. Its consistent financial growth, strong order book, and strategic objectives make its IPO an attractive proposition. Investors should evaluate their risk tolerance and investment horizon while considering this opportunity.

With its listing on BSE and NSE, Enviro Infra Engineers is poised to make a significant impact in the capital market, driving its growth trajectory further.