Envirotech Systems Limited, a leading provider of acoustic solutions, made a remarkable entrance on the NSE SME on September 23, 2024. The shares debuted at a 90% premium, listing at ₹56 per share, quickly hitting the upper price band due to strong market demand.

IPO Overview

Envirotech's Book Built Issue raised ₹30.24 crores through the offering of 54 lakh fresh shares. The subscription period for this IPO was from September 13 to September 18, 2024. Retail investors were required to invest a minimum of ₹112,000 for 2,000 shares, while High-Net-Worth Individuals (HNIs) had a minimum investment of ₹224,000 for 4,000 shares.

Subscription Details

The IPO was oversubscribed by 26.17 times on its final day of subscription, reflecting a robust demand from investors. As of 01:08 PM on September 19, 2024, the IPO was generating significant interest, leading to strong performance on listing day.

Financial Performance

Envirotech has demonstrated impressive financial growth:

Revenue: Increased from ₹1,849.54 lakh in FY22 to ₹4,687.95 lakh in FY24.

EBITDA: Rose from ₹196.48 lakh in FY22 to ₹1,660.09 lakh in FY24.

Profit After Tax (PAT): Grew from ₹105.73 lakh in FY22 to ₹1,142.88 lakh in FY24.

These metrics indicate a steady financial performance, underscoring the company's strong market position and operational efficiency.

Valuation Metrics

The company has a pre-issue EPS of ₹8.54 and a post-issue EPS of ₹6.08. The pre-issue P/E ratio is 6.55x, while the post-issue P/E ratio stands at 9.21x. The ROCE for FY24 is 62.43%, and the ROE is 58.29%, suggesting that the IPO is attractively priced compared to industry averages.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for Envirotech was estimated between ₹20 and ₹22, indicating favorable sentiment towards the stock ahead of its debut. The expected listing gains are estimated between 40% to 45%, reinforcing investor confidence.

Investment Outlook

Given the strong demand during the subscription phase, combined with the company's solid financial performance and growth trajectory, the Envirotech Systems IPO presents a compelling opportunity for both short-term listing gains and long-term investment.

Conclusion

Investors looking for growth in the acoustic solutions sector may find Envirotech Systems Limited an appealing option, especially considering its successful debut and promising financial outlook.

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