The much-anticipated Envirotech Systems Limited IPO has opened for subscription, attracting significant interest from retail investors and high-net-worth individuals alike. The IPO, which is being offered at a price band of ₹53 to ₹56 per share, consists entirely of a fresh issue of 54 lakh shares, amounting to ₹30.24 crores. Investors can subscribe to the IPO from September 13 to September 18, 2024, with the allotment likely to be finalized on September 19, and shares expected to be listed on the NSE SME by September 23, 2024.

Envirotech Systems Limited, known for its leading-edge acoustic solutions, has carved a niche in providing comprehensive noise control solutions across a wide range of industries. The company’s robust product portfolio addresses diverse acoustic insulation and noise suppression needs, making it a leader in the field.

Subscription Details and Grey Market Premium

On its first day of subscription, the IPO has been subscribed 2.13 times, reflecting strong demand. The Grey Market Premium (GMP) for the Envirotech Systems Limited IPO is currently in the range of ₹20 to ₹25, hinting at potential listing gains. However, it’s important to note that GMP figures are purely speculative and based on demand-supply dynamics in the informal market. These should not be used as the sole determinant for investment decisions.

The minimum lot size for retail investors is set at 2,000 shares, translating into a minimum investment of ₹112,000. For High-Net-Worth Individuals (HNIs), the minimum investment requirement is 2 lots (4,000 shares), or ₹224,000.

Share India Capital Services Pvt. Ltd. is acting as the Book Running Lead Manager, while BIGSHARE SERVICES Pvt. Ltd. has been appointed as the registrar for the IPO. The sole market maker for the IPO is Share India Securities Limited.

Anchor Investors and IPO Performance

Before the official opening of the IPO, Envirotech Systems raised ₹7.87 crores from anchor investors at ₹56 per share, a positive signal that institutional investors are showing faith in the company’s growth prospects. Anchor investors received 1,406,000 equity shares, setting the stage for a robust subscription period.

Objectives of the IPO

The primary objectives of the Envirotech Systems Limited IPO are focused on expansion and growth, with proceeds earmarked for the following:

₹1,200 Lakhs for the purchase of land and building to set up a new factory.

₹800 Lakhs for funding working capital requirements.

Allocations for general corporate purposes and issue expenses.

The company aims to use these funds to enhance its production capabilities, scale its operations, and improve working capital for future growth.

Financial Performance and Valuation

Envirotech Systems Limited has shown consistent growth in revenues, increasing from ₹1,849.54 lakhs in FY22 to ₹4,687.95 lakhs in FY24. Similarly, the company’s EBITDA surged from ₹196.48 lakhs in FY22 to ₹1,660.09 lakhs in FY24, while PAT jumped from ₹105.73 lakhs in FY22 to ₹1,142.88 lakhs in FY24. These financials reflect the company’s steady upward trajectory.

The Pre-issue EPS is ₹8.54, with a Post-issue EPS of ₹6.08. The P/E ratio stands at 6.55x pre-issue and 9.21x post-issue, suggesting that the IPO is fairly priced. With a Return on Capital Employed (ROCE) of 62.43% and a Return on Equity (ROE) of 58.29% for FY24, Envirotech Systems appears to offer good value to potential investors.

How to Check Allotment Status

Investors eagerly awaiting the allotment of shares can check the status via the registrar’s website once the allotment is finalized. Here's how:

Navigate to the IPO allotment status page.

Select Envirotech Systems Limited IPO from the dropdown list of IPOs.

Enter your application number, PAN, or DP Client ID.

Submit the details to check your allotment status.

The allotment process will likely be completed on or about September 19, 2024. Investors can follow the above steps to verify their allotment status and plan their next move accordingly.

Conclusion and Recommendation

Given the strong financial performance, reasonable valuation, and significant interest from anchor investors, Envirotech Systems Limited IPO seems like a promising opportunity for both listing gains and long-term investment. The company's focus on expansion and growth aligns well with its positive financial track record, making it an attractive proposition in the current market. However, as always, potential investors should consider their own risk tolerance and consult with financial advisors before making any investment decisions.

Disclaimer: This review is for educational purposes only and should not be considered financial advice. Investors should conduct their own research or consult with a professional before investing. The information provided here is based on public data and is subject to change.

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