Envirotech Systems Limited is a leading company in the acoustic solutions industry, offering a comprehensive range of noise control products across various sectors. The company, through its innovations, aims to address the growing demand for soundproofing and noise reduction solutions in fields like manufacturing, construction, entertainment, and more.

With the launch of the Envirotech Systems Limited IPO, the company is seeking to raise ₹30.24 crores through a fresh issue of 54 lakh shares. The IPO opens for subscription on September 13, 2024, and closes on September 18, 2024. The price band for the IPO has been set at ₹53 to ₹56 per equity share, and investors can buy a minimum lot of 2,000 shares, amounting to an initial investment of ₹112,000.

The book-running lead manager for the IPO is Share India Capital Services Private Limited, while the registrar is BIGSHARE SERVICES PRIVATE LIMITED. The IPO listing will take place on the NSE SME platform, with a tentative listing date of September 24, 2024.

Financial Overview

Envirotech Systems Limited has shown consistent financial growth over the years. In FY2022, the company's revenue stood at ₹1,849.54 lakhs, which increased to ₹2,874.78 lakhs in FY2023. By FY2024, the revenue surged further to ₹4,687.95 lakhs, showing a significant uptick in its financial health.

Additionally, EBITDA for FY2024 reached ₹1,660.09 lakhs, compared to ₹405.72 lakhs in FY2023. The Profit After Tax (PAT) also exhibited a remarkable increase, rising from ₹257.34 lakhs in FY2023 to ₹1,142.88 lakhs in FY2024, highlighting the company’s profitability.

Valuation Metrics

For the Envirotech Systems Limited IPO, the pre-issue Earnings Per Share (EPS) is ₹8.54, and the post-issue EPS is ₹6.08. The company’s pre-issue Price-to-Earnings (P/E) ratio stands at 6.55x, while the post-issue P/E ratio is 9.21x. These figures suggest that the IPO is reasonably priced, offering a good balance between risk and reward for investors. Additionally, the company’s Return on Capital Employed (ROCE) is 62.43%, and Return on Equity (ROE) is 58.29%, both of which are impressive indicators of financial efficiency.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for Envirotech Systems Limited’s IPO is currently hovering between ₹20 and ₹22. This suggests a potential listing gain of 40%-45% for investors who subscribe at the upper end of the price band. It’s important to note that while GMP can be a useful indicator, it is not always an accurate predictor of post-listing performance. Hence, investors should exercise caution and rely on fundamental analysis rather than solely on GMP.

IPO Subscription Status

As of September 19, 2024, Envirotech Systems IPO has received robust demand, with a subscription status of 26.17 times. The strong interest from investors, particularly in the retail and institutional categories, underscores the confidence in the company’s growth potential. The Anchor Investor portion raised ₹7.87 crores by allocating 1,406,000 shares at ₹56 per share.

Allotment and Listing Details

The allotment date for Envirotech Systems Limited IPO is September 19, 2024. Investors who applied for shares can check their allotment status through the registrar’s website or through their broker's platform. Here’s how you can check the status:

Go to the Registrar’s IPO Allotment Status page.

Select Envirotech Systems Limited IPO from the dropdown list.

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

Submit the details to view your allotment status.

The shares are expected to be listed on NSE SME on September 23, 2024.

Objectives of the IPO

The net proceeds from the IPO will be used for the following purposes:

Purchase of land and building for a new factory – ₹1,200.00 lakhs.

Funding of working capital requirements – ₹800.00 lakhs.

General corporate purposes.

Issue expenses.

These objectives are aimed at expanding the company’s operations and improving its production capabilities to meet the growing demand for its acoustic solutions.

Should You Subscribe?

Given the company’s strong financial performance and promising growth trajectory, the Envirotech Systems Limited IPO offers an attractive opportunity for both retail and institutional investors. With a GMP indicating potential listing gains and robust subscription figures, the IPO has garnered significant interest from market participants.

For investors looking for long-term value, the company’s expanding footprint in the acoustic solutions market, coupled with its sound financials, makes it a compelling choice. Additionally, the company’s valuation is reasonable, with healthy ROCE and ROE figures that suggest efficient use of capital and shareholder equity.

Conclusion

Envirotech Systems Limited is well-positioned to capitalize on the increasing demand for acoustic solutions, and its IPO presents an opportunity for investors to participate in its growth story. With robust financials, a strong market presence, and a reasonable price band, the IPO is suitable for investors seeking both short-term listing gains and long-term growth potential.

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