Enviro Infra Engineers Limited IPO presents a compelling opportunity for investors interested in companies specializing in water and wastewater treatment projects. This IPO opens on November 22, 2024, and closes on November 26, 2024, with the objective of funding growth and improving operational capacity.

IPO Details and Structure

The total issue size of ₹650.43 Crores comprises:

• Fresh Issue of 386.80 lakh shares worth ₹572.33 Crores.
• Offer for Sale (OFS) of 52.68 lakh shares amounting to ₹77.97 Crores.

The price band is set between ₹140 and ₹148 per share, with a minimum lot size of 101 shares. Retail investors need to invest a minimum of ₹14,948, while High-Net-Worth Individuals (HNIs) must invest ₹2,09,272 (14 lots).

With a tentative listing date of November 29, 2024, on the BSE and NSE, Enviro Infra Engineers aims for a post-issue market capitalization of ₹2,597.84 Crore at the upper price band.

Objectives of the IPO

The proceeds from the IPO will be utilized for:

1. Working Capital Requirements: ₹18,100 Lakhs.
2. Funding Subsidiary Projects: ₹3,000 Lakhs for a 60 MLD STP under the Mathura Sewerage Scheme.
3. Debt Repayment: ₹12,000 Lakhs.
4. Inorganic Growth: To support acquisitions and corporate purposes.

Financial Performance

Enviro Infra Engineers has demonstrated strong financial growth over the last three years:

• Revenue: ₹73,800.46 Lakhs (FY24), ₹34,166.24 Lakhs (FY23), and ₹22,562 Lakhs (FY22).
• EBITDA: ₹17,841.20 Lakhs (FY24), ₹8,524.78 Lakhs (FY23), and ₹5,212.11 Lakhs (FY22).
• Profit After Tax (PAT): ₹10,856.95 Lakhs (FY24), ₹5,533.89 Lakhs (FY23), and ₹3,454.86 Lakhs (FY22).

The Return on Capital Employed (ROCE) and Return on Equity (ROE) for FY24 stand at 32.34% and 51.68%, respectively, indicating efficient capital usage and profitability.

Anchor Investors and Grey Market Premium

The IPO has already garnered attention from anchor investors, raising ₹194.69 Crores at ₹148 per share. The Grey Market Premium (GMP) of ₹45 suggests a 30% potential listing gain, although actual prices depend on market dynamics.

Subscription and Allotment

On the first day of the subscription period, the IPO was subscribed 2.07 times. Investors can check their allotment status on November 27, 2024, using their application number, PAN, or DP Client ID on the registrar's website.

Investment Insights

The company's pre-issue EPS of ₹8.13 and post-issue EPS of ₹6.30, coupled with a P/E ratio of 18.20x (pre-issue) and 23.50x (post-issue), make it attractively priced against an industry P/E of 30x.

Recommendation: Based on robust financials, a fair valuation, and a strong focus on sustainable infrastructure, Enviro Infra Engineers Limited IPO is a promising investment opportunity for both listing gains and long-term growth.

Investors seeking exposure to the growing water and wastewater infrastructure sector should consider applying to this IPO.

The Upcoming IPOs in this week and coming weeks are  Rajesh Power Services, Rajputana Biodiesel, Apex Ecotech, Abha Power and Steel, Agarwal Toughened, Ganesh Infraworld, Rosmerta Digital, Avanse Financial and Nisus Finance.