Upcoming IPO: Enviro Infra Engineers' GMP Jumps Ahead Of Subscription; Latest GMP & Key Dates Here

Enviro Infra Engineers Limited, a leading player in water and wastewater treatment projects, is set to launch its Rs 638.86-crore initial public offering (IPO) on Friday, November 22. This IPO aims to capitalize on the company's growth trajectory and strong market presence. The subscription period closes on Tuesday, November 26, with anchor allocation scheduled a day earlier, on November 21.

IPO Structure and Key Details
The IPO includes a fresh issuance of 3.87 crore equity shares and an offer-for-sale (OFS) of 52.68 lakh shares by the promoters, collectively valued at Rs 638.86 crore at the upper price band. The price band for the offer is set between Rs 140 and Rs 148 per equity share, and the lot size is fixed at 101 shares, with further bids allowed in multiples of 101.

Key reservations in the IPO allocation are:
50% for Qualified Institutional Buyers (QIBs)
15% for Non-Institutional Investors (NIIs)
35% for Retail Investors
Additionally, 1,00,000 equity shares are reserved for employees at a discounted price of Rs 135 per share.

Shares will be allocated to investors on November 27, with refunds processed on the same day. Demat accounts will be credited by November 28, and trading on the BSE and NSE is expected to commence on November 29.

Business Model and Order Book
Enviro Infra Engineers, established in 2009, specializes in designing, constructing, operating, and maintaining water and wastewater treatment plants (WWTPs) and water supply schemes (WSSPs) for state governments and urban local bodies (ULBs). The company predominantly undertakes projects through the Engineering, Procurement, and Construction (EPC) and Hybrid Annuity Model (HAM) frameworks.

Over the past seven years, Enviro Infra has completed 28 WWTPs and WSSPs across India, with 22 of these projects having a capacity of 10 million litres per day (MLD) or more. As of June 30, 2024, the company's order book stands at Rs 1,906.28 crore, encompassing 21 ongoing projects.

Financial Performance
Enviro Infra Engineers has demonstrated remarkable financial growth over the last three fiscal years. In FY22, the revenue was at Rs 225.62 crore and the net profit was at Rs 34.55 crore. In FY23, the revenue surged to Rs 341.66 crore, with a net profit of Rs 55.34 crore. In FY24, Revenue soared to Rs 738 crore, with net profit more than doubling to Rs 108.57 crore. The momentum continued in Q1FY25, ending June 30, 2024, with a revenue of Rs 207.46 crore and a net profit of Rs 29.97 crore.

Use of IPO Proceeds
The company plans to utilize the funds raised from the fresh issuance for working capital requirements, supporting its subsidiary, EIEL Mathura, in building a 60 MLD sewage treatment plant (STP) for the Mathura Sewerage Scheme, repayment of existing debt, and potential acquisitions and general corporate purposes.

Enviro Infra competes with industry leaders like EMS Ltd (P/E: 25.92), ION Exchange Ltd (P/E: 38.68), Va Tech Wabag Ltd (P/E: 43.90), and Vishnu Prakash R Punglia Ltd (P/E: 25.31). With a strong order book, proven expertise, and steady financial performance, the company is well-positioned to expand its market presence.

Grey Market Sentiment
The grey market premium (GMP) for Enviro Infra Engineers' shares stands at Rs 31, reflecting investor optimism. This indicates a potential listing price of Rs 179, representing a 20.95% premium over the upper IPO price of Rs 148.

Experts suggest that the upward trend in GMP reflects robust demand and positive sentiment around the IPO, making it a compelling opportunity for both institutional and retail investors.

Stakeholders and Promoters
The company's promoters-Sanjay Jain, Manish Jain, Ritu Jain, and Shachi Jain-hold 99.97% of the pre-offer equity. Post-IPO, their shareholding is expected to dilute but will continue to be significant.