Enviro Infra Engineers Limited will soon launch its Initial Public Offering (IPO). This IPO consists of a fresh issue and an offer for sale (OFS). The fresh issue aims to raise Rs 572.46 crore, while the OFS targets Rs. 77.97 crore. The total offer size is expected to reach Rs. 650.43 crore. The IPO will open for bidding on November 22, 2024, and close on November 26, 2024. Enviro Infra Engineers shares are likely to be listed on the NSE and BSE on November 29.
GMP of Enviro Infra Engineers
The shares of Enviro Infra Engineers Limited’s price in the grey market were trading at a 17.57% premium as of November 19th, 2024. The shares in Grey Market traded at Rs 174. This gives it a premium of Rs. 26 per share over the cap price of Rs. 148.
Overview of Enviro Infra Engineers
Enviro Infra Engineers Limited was established in 2009 and specializes in the design, construction, operation, and maintenance of water and wastewater treatment plants (WWTPs) and water supply scheme projects (WSSPs) for government authorities.
The company has successfully developed 28 projects across India in the past seven years, including 22 projects with capacity exceeding 10 MLD, demonstrating its strong execution capabilities in the sector. As of June 2024, the company maintains a robust order book of 21 WWTPs and WSSPs projects.
The company participates in government tenders for projects funded under various central schemes like AMRUT, NMCG, and Jal Jeevan Mission, executing them on an EPC or HAM basis. The company’s treatment processes are predominantly Zero Liquid Discharge (ZLD) compliant, enabling treated water usage in horticulture, washing, and process industries.
Promoters of Enviro Infra Engineers
Enviro Infra Engineers Limited is promoted by Sanjay Jain, Manish Jain, Ritu Jain, and Shachi Jain. They bring industry expertise and strategic guidance to the company’s operations.
The offer for sale includes equity shares from all four promoters. Sanjay Jain and Manish Jain each offer 21,34,000 shares, while Ritu Jain and Shachi Jain each offer 5,00,000 shares.
Lead Managers of Enviro Infra Engineers
The IPO is managed by Hem Securities Limited as the book-running lead manager. Bigshare Services Private Limited serves as the registrar, ensuring a smooth allotment and application process.
Objectives of Enviro Infra Engineers
The primary objectives of the Enviro Infra Engineers IPO are:
● To meet the working capital requirements of Rs. 181 crore
● Invest in new business initiatives and expansion to build 60 MLD STP under the project titled ‘Mathura Sewerage Scheme” at Mathura in Uttar Pradesh of Rs. 30 crore
● Repay existing borrowings of Rs. 120 crore
● Remaining for general corporate purposes.
Financial Analysis of Enviro Infra Engineers
Enviro Infra Engineers Limited’s revenue has increased from Rs 338.10 crore in FY23 to Rs. 728.92 crore in FY24, which has grown by 115.59%. The net profit has increased by 101.05% from Rs. 54.98 crore in FY23 to Rs. 110.54 crore in FY24.
Enviro Infra Engineers Limited’s revenue and net profit have grown at a CAGR of 80.81 percent and 78.09%, respectively, over the last two years.
In the June quarter, the company earned revenue of Rs. 205.18 crore and a net profit of Rs. 30.78 crore. Enviro Infra Engineers Limited has maintained an EBITDA margin of 24.99% and a net profit margin of 15%.
Enviro Infra Engineers Limited’s order book has increased by 42.02%, from Rs. 1,496.69 crore in FY23 to 2,125.59 crore in FY24. The company maintained an order book of Rs. 1,906.28 crore in June 2024.
The company’s EBITDA margin has decreased from 24.16% in FY23 to 23.23% in FY24. The PAT margin also decreased from 16.26% to 15.17% in FY24. The company ROE of the Enviro Infra Engineers is to be 37.83% in FY24. The debt-to-equity ratio of the company has increased from 0.51x in FY23 to 0.80x in FY24.
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Enviro Infra Engineers vs. Peers
Enviro Infra Engineers competes with established peers like EMS Limited, ION Exchange Limited, Va Tech Wabag Limited, and Vishnu Prakash R Punglia Limited. Enviro Infra Engineers Limited’s revenue is lower than other competitors and has a higher return on bet worth compared to its peers, which is 37.83 percent.
Strengths and Weaknesses
Enviro Infra Engineers demonstrates significant strengths through its robust in-house design and engineering capabilities, supported by a team of 180 engineers. The company has strong expertise in water and wastewater treatment projects.
The company’s proven track record in timely project execution and established relationships with government bodies has helped secure a diversified order book across India, while their expertise in advanced water treatment technologies reinforces their market position.
However, the company faces considerable challenges, primarily its heavy dependence on government contracts, which exposes it to regulatory risks and policy changes. Additionally,
the company’s limited geographical diversification compared to larger peers, coupled with vulnerability to fluctuating material costs, poses potential risks to sustained growth and profitability.
Conclusion
Enviro Infra Engineers Limited’s IPO presents an opportunity for investors to participate in the growing water and wastewater treatment sector. With strong leadership, a proven track record, and ambitious growth plans, the company is well-positioned for future success. However, potential investors should consider risks like regulatory dependencies and industry competition before investing.
Written By – Nikhil Naik
Disclaimer
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