Apex Ecotech Limited is set to make its mark in the Indian capital markets with its upcoming IPO, offering a fresh issue of 34.99 lakh shares worth ₹25.54 Crores. The company specializes in providing end-to-end water and wastewater management solutions, including services for industrial water treatment, effluent treatment, sewage treatment, and zero liquid discharge (ZLD) systems. The company’s sustainable, turnkey projects encompass the entire lifecycle from design to installation, commissioning, and operation and maintenance (O&M), with a focus on ensuring efficient and eco-friendly water management.

The subscription period for the Apex Ecotech IPO opens on November 27, 2024, and closes on November 29, 2024. The price band for the IPO is set at ₹71 to ₹73 per equity share, with the market capitalization of ₹96.25 Crores at the upper price band of ₹73 per share. The lot size for the IPO is 1,600 shares, with a minimum investment of ₹1,16,800 for retail investors. High-Net-Worth Individuals (HNIs) are required to invest a minimum of ₹2,33,600 (2 lots, or 3,200 shares).

As of November 29, 2024, the IPO had been oversubscribed by 420.73 times, signaling significant demand and interest from investors. The allotment process is expected to be finalized by December 2, 2024, with the shares set to be listed on the NSE SME on December 4, 2024.

Financial Performance and Market Insights

Apex Ecotech has shown solid financial growth over the past few years. The company reported revenue of ₹2,182.60 Lakhs for the quarter ended September 30, 2024, with an increase from ₹2,002.86 Lakhs in FY2022 and ₹3,492.06 Lakhs in FY2023. The EBITDA for the same period stood at ₹220.41 Lakhs in FY2024, a significant rise from just ₹8.54 Lakhs in FY2022, reflecting strong operational efficiency.

The Profit After Tax (PAT) also demonstrated positive momentum, growing from a loss of ₹65.86 Lakhs in FY2022 to a PAT of ₹155.26 Lakhs in Q2 FY2024. This suggests a positive trajectory, indicating that the company has improved its profitability and is on track to meet its business objectives.

For the Apex Ecotech IPO, the company has a pre-issue EPS of ₹7.25, which is expected to decrease to ₹5.03 post-issue. The pre-issue P/E ratio stands at 10.07x, while the post-issue P/E ratio is 14.52x. The industry P/E ratio is 30x, highlighting the attractive pricing of the IPO compared to its industry peers. Additionally, the company’s Return on Capital Employed (ROCE) for FY24 is 59.61%, and its Return on Net Worth (RoNW) is 60.38%, suggesting a high return potential for investors.

Grey Market Premium (GMP) and IPO Review

The Grey Market Premium (GMP) for the Apex Ecotech IPO is currently ₹15, indicating potential listing gains of around 20%. However, it’s important to note that trading in the grey market is unregulated and speculative, with prices determined by demand and supply dynamics. It’s crucial for investors to remember that GMP should be considered as informational and not as a sole basis for investment decisions.

Given the company’s strong financial performance, robust market prospects in the water and wastewater treatment sector, and attractive IPO valuation, the Apex Ecotech IPO offers a compelling opportunity for risk-tolerant investors seeking listing gains. However, for more conservative investors, caution is advised, especially given the volatile nature of IPO investments.

Apex Ecotech IPO Allotment Process and Instructions

Investors who applied for the Apex Ecotech IPO can check their allotment status once it is finalized on December 2, 2024. To check the status:

The Upcoming IPOs in this week and coming weeks are Nisus Finance, Emerald Tyre Manufacturers, Rosmerta Digital and Avanse Financial.

The Current active IPO is Ganesh Infraworld and Suraksha Diagnostic.

1. Visit the registrar’s website.
2. Select Apex Ecotech Limited IPO from the dropdown list.
3. Enter your application number, PAN, or DP Client ID.
4. Submit the details to view your allotment status.

Use of IPO Proceeds

The fresh issue proceeds will be allocated towards the following objectives:

1. ₹1,700 Lakhs for working capital requirements.
2. The remainder will be used for general corporate purposes.

Conclusion

The Apex Ecotech IPO presents a great investment opportunity in the water and wastewater management sector, which is poised for growth. With solid financials, high return ratios, and an attractive IPO valuation, the offering looks promising for investors with a higher risk tolerance looking for potential listing gains. While the IPO has strong upside potential, investors should evaluate their risk appetite before applying.

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