GEM Enviro Management IPO Review

GEM Enviro Management Limited (“GEM”) is a leading Waste Management Agency (WMA) providing variety of sustainability services to its clients. GEM is committed to a sustainable future and is focused towards making businesses across the world sustainable by providing sustainable solutions to its clients.

Mr. Sachin Sharma, Mr. Dinesh Pareekh and Mrs. Sangeeta Pareekh, the initial promoters of GEM Enviro Management Limited, bring a wealth of experience and dedication to the realm of sustainability. They have experience of over 20 to 30 years in this industry. 

Financially, GEM Enviro revenue increased from ₹2,551.42 Lakhs in FY21 to ₹3,280.00 in FY22 and risen more in FY23 to ₹4,253.02 Lakhs but currently fallen at ₹2,620.94 Lakhs for the 9MFY24. Similarly, EBITDA rose from ₹809.02 Lakhs in FY21 to ₹1,003.49 Lakhs in FY22 and further to ₹1,355.06 Lakhs in FY23 and but currently facing loss at ₹1,138.46 Lakhs for the 9MFY24. PAT surged from ₹583.38 Lakhs in FY21 to ₹745.23 Lakhs in FY22 and risen more in FY23 to ₹1,001.82 Lakhs but plunging at ₹840.42 Lakhs in 9MFY24. This indicates steady growth in financial performance. 

For the GEM Enviro IPO, the company is issuing shares at a pre-issue EPS of ₹3.99 and a post-issue EPS of ₹3.72. The pre-issue P/E ratio is 18.79x, while the post-issue P/E ratio is 20.16x against the construction industry P/E ratio of 37.0x. The company's ROCE for 9MFY24 is 36.55%, and ROE for 9MFY24 is 30.48%. These metrics suggest that the IPO is fairly priced.

The Grey Market Premium (GMP) indicates potential listing gain of 70% - 80%. Given the company's steady financial performance and the valuation of the IPO, we recommend Investors to apply in the IPO for listing gains and long term Investment purposes.