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Concord Enviro Systems IPO subscribed 0.92 times on Day 2. Check GMP and other details
Team Finance Saathi
20/Dec/2024
What's covered under the Article:
- Concord Enviro Systems IPO details: Price band ₹665-701, GMP ₹154, and expected listing on Dec 27, 2024.
- Allotment details: IPO subscription status, anchor investors, and IPO objectives.
- IPO Review: Company growth, financials, and valuation with recommendations for investors.
Concord Enviro Systems IPO Overview
Concord Enviro Systems, a leader in innovative industrial wastewater solutions, is all set to launch its IPO to raise ₹500.33 Crores. The company, established in 1992, has pioneered technologies in Reverse Osmosis and Green ZLD (Zero Liquid Discharge) solutions. Their expertise and commitment to a circular economy position them as key players in the water treatment industry.
IPO Details
The IPO consists of two components: a Fresh Issue of 24.96 Lakh shares worth ₹175 Crores and an Offer for Sale (OFS) of 46.40 Lakh shares, amounting to ₹325.32 Crores. The price band for the IPO has been set between ₹665 and ₹701 per share, with a lot size of 21 shares. The IPO subscription period commenced on December 19, 2024, and will close on December 23, 2024. The shares are expected to be listed on the BSE and NSE on or around December 27, 2024.
The IPO is likely to be subscribed at high rates, as indicated by the current Grey Market Premium (GMP) of ₹154, which reflects a potential listing gain of 21.97%. This suggests strong demand for the shares in the unorganised market. However, GMP alone should not be used as a deciding factor for investment decisions.
IPO Subscription and Allotment Status
As of December 20, 2024, the IPO has been subscribed 0.92 times. Retail investors can apply for a minimum of ₹14,721, while High-Net-Worth Individuals (HNIs) can invest ₹2,06,094 for 14 lots. The IPO allotment will be finalized by December 24, 2024, and the allotment status can be checked on the registrar’s website.
The company raised ₹150.09 Crores from anchor investors at the upper price band of ₹701 per share. These funds will help in supporting the company’s expansion and capital expenditure projects, including investments in subsidiaries like Concord Enviro FZE and Rochem Separation Systems (India) Private Limited.
Financial Performance and Valuation
The company’s revenue for FY24 stands at ₹2,080.24 Million, with an EBITDA of ₹154.16 Million. The profit after tax (PAT) for FY24 showed a loss of ₹11.07 Million, but past years have been profitable, with the FY23 PAT at ₹415.93 Million. Despite the recent losses, the company maintains strong growth prospects due to its focus on innovation and environmental sustainability.
The IPO is priced at a pre-issue P/E ratio of 30.79x and a post-issue P/E ratio of 34.88x, compared to the industry average P/E of 49x. This suggests the IPO is fairly priced in terms of market expectations and can be attractive for long-term investors.
Objectives of the IPO
The funds raised through the IPO will be used for various strategic purposes:
- Expansion of manufacturing facilities in the UAE and India.
- Repayment of loans and funding for working capital requirements.
- Investment in technology and growth initiatives.
- Support for Roserve Enviro Private Limited, the joint venture focused on pay-per-use wastewater treatment.
Should You Invest in Concord Enviro Systems IPO?
Given the company’s strong track record in industrial wastewater management, its promising growth strategy, and the reasonable valuation at IPO, Concord Enviro Systems presents a solid investment opportunity. However, considering its recent losses and potential market fluctuations, investors should approach with caution. The GMP indicates good listing gains, but the IPO might be more suitable for long-term investors who believe in the company’s sustainable growth path.