Enviro Infra Engineers Limited (EIEL) is all set to launch its IPO in 2024, offering investors a chance to invest in a prominent player in the water treatment and infrastructure sector. The IPO opens for subscription from November 22 to November 26, 2024, with a tentative listing date scheduled for November 29, 2024. The company is raising a total of ₹650.43 Crore through a book-built issue, consisting of ₹572.33 Crore in a fresh issue of 386.80 Lakh shares and an Offer for Sale (OFS) of 52.68 Lakh shares worth ₹77.97 Crore. The price band is set between ₹140 and ₹148 per equity share, with the minimum lot size being 101 shares.

For retail investors, the minimum investment required is ₹14,948, while High-Net-Worth Individuals (HNIs) will need to invest ₹2,09,272 for 14 lots (1414 shares). The market capitalization of Enviro Infra Engineers at the upper price band of ₹148 per share will be approximately ₹2,597.84 Crore, offering significant growth potential as the company strengthens its position in the water and wastewater treatment sector.

Grey Market Premium (GMP) and Subscription Status

As of November 26, 2024, the Enviro Infra Engineers IPO has seen an impressive 20x subscription on its final day, signaling strong investor demand. The grey market premium (GMP) is ₹45 (a 30% premium) based on the upper price band of ₹148, suggesting a positive market sentiment ahead of the listing. However, the GMP should be approached with caution as it does not reflect the official market price, and actual listing performance can vary.

Financial Overview

Enviro Infra Engineers has shown significant financial growth over the past few years, with Revenue increasing from ₹22,562 Lakhs in FY22 to ₹73,800.46 Lakhs in FY24. The EBITDA for FY24 is ₹17,841.20 Lakhs, showcasing strong operational efficiency. The company reported a Profit After Tax (PAT) of ₹10,856.95 Lakhs in FY24, indicating solid profitability. With a Return on Capital Employed (ROCE) of 32.34% and a Return on Equity (RoE) of 51.68%, Enviro Infra Engineers demonstrates robust financial performance, which positions it as a potentially rewarding investment.

IPO Objectives and Utilization of Funds

The proceeds from the fresh issue will be allocated toward:

• ₹18,100 Lakhs for working capital requirements.
• ₹3,000 Lakhs for infusion into the subsidiary EIEL Mathura Infra Engineers to build a 60 MLD STP for the Mathura Sewerage Scheme in Uttar Pradesh.
• ₹12,000 Lakhs for repaying or prepaying outstanding borrowings.
• The remaining funds will be used for acquisitions and general corporate purposes.
  
  The Current active IPO is Rajputana Biodiesel, Rajesh Power Services, C2C Advanced System, Enviro Infra Engineers and Lomosaic India.

Should You Invest in Enviro Infra Engineers IPO?

Given the company's solid financial track record, strong growth trajectory, and high demand in the water treatment and infrastructure space, the Enviro Infra Engineers IPO seems like an attractive opportunity for both listing gains and long-term investments. The IPO is priced at a pre-issue P/E ratio of 18.20x, which is lower than the industry average of 30x, making it reasonably valued.

Additionally, the grey market premium reflects potential listing gains, and with steady profitability, the IPO appears to be well-positioned for both short-term and long-term returns. For investors seeking exposure to the water infrastructure sector, the IPO offers a promising opportunity.

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