Is Enviro Infra Engineers IPO Worth Your Investment? Key Insights
Nov 21, 2024
The upcoming-anticipated Enviro Infra Engineers IPO is ready to open for subscription from November 22 to November 26, 2024, aiming to raise funds around ₹650 crore with a mixed combination of fresh equity of 3.87 crore equity shares and an Offer for Sale (OFS). Along with a price band of 140-148 per share, this IPO presents retail investors with a minimum bid size of 101 shares or with a minimum investment of ₹14,948. The Enviro Infra IPO highlights the growing interest in water and wastewater treatment solutions, a sector vital to India's infrastructure and environmental goals.
Overview of Enviro Infra Engineers Ltd.
Enviro Infra Engineers Ltd., established in 2009, specializes in designing, building, constructing, and maintaining water and wastewater treatment plants (WWTPs) and water supply scheme projects (WSSPs). The enterprise along with more than 28 completed projects across India, the organization has constructed a strong reputation in areas such as sewage treatment, zero liquid discharge systems, and rural water supply through government-backed initiatives just like the Jal Jeevan Mission (JJM) and the National Mission for Clean Ganga (NMCG).
As of June 2024, Enviro Infra Engineers’s order book stood at ₹1,906.28 crore, reflecting its robust pipeline of 21 ongoing projects, consisting of large-scale WWTPs. The corporation’s consumer base basically consists of government and urban nearby city agencies or local bodies, ensuring constant revenue generation.
Enviro Infra’s operations are highly dependent on project activities Engineering, Procurement, and Construction (EPC) and Hybrid Annuity Models (HAM). The company generates revenue with the aid of government tenders and long-term contracts with urban local bodies and municipalities. This sales revenue is further supported by means of imperative authorities and government funding, making Enviro Infra Engineers Ltd. much less prone to payment delays or project cancellations.
The business enterprise has diversified services, making sure compliance adherence with zero liquid discharge (ZLD) requirements. Its projects enable water to be reused for horticulture, industrial practices, and irrigation, contributing to sustainable water management.
Enviro Infra Engineers IPO Details and Price Band
Key Information | IPO Details |
IPO Start Date | November 22, 2024 |
IPO End Date | November 26, 2024 |
Allotment Finalization | November 27, 2024 |
IPO Listing Date | November 29, 2024 |
Total Issue Size | ₹650 Cr |
Price Band | ₹140-₹148 per share |
IPO Lot Size | 101 shares |
Financial Performance
Enviro Infra’s IPO consistent financial growth is evident, with a 116% increase in revenue and 96% growth in net profit from FY23 to FY24. These numbers highlight its strong operational performance efficiency and potential to scale.
Financials (in ₹ Cr) | FY22 | FY23 | FY24 |
Revenue | 225 | 341 | 738 |
Net Profit | 34 | 54 | 110 |
EBITDA Margin | 22% | 24% | 23% |
Objectives of the Enviro Infra IPO
The funds of IPO proceeds would be utilized and allocated towards operational activities and the following objectives:
Working Capital: ₹181 crore will address the company’s working capital needs.
Sewage Treatment Plant: ₹30 crore will fund a 60 MLD sewage treatment project in Mathura.
Debt Repayment: ₹100 crore will reduce outstanding borrowings, improving financial leverage.
Future Projects: Additional funds will support organic growth opportunities and general corporate purposes.
Investment Considerations
1. Sectoral Relevance
With increasing government emphasis on water conservation and wastewater management, Enviro Infra Engineers Ltd. operates in a critical and growing sector. Projects backed by national initiatives like AMRUT and JJM provide the company with a stable revenue stream and long-term growth potential.
2. Financial Stability
Enviro Infra Engineers Ltd. has shown consistent financial performance results and with EBITDA margins and a fine manageable debt-to-equity ratio. The utilization of IPO proceeds for debt reduction would help further strengthen its balance sheet and enhance investor confidence.
3. Valuation and Peer Comparison
At a price band of ₹146-148, the IPO’s valuation appears reasonable compared to peers like EMS Ltd (P/E 25.92) and Va Tech Wabag (P/E 43.90). Investors seeking exposure to infrastructure growth may find the valuation appealing. The Enviro Infra IPO’s price band and Enviro Infra Engineers Limited Share Price ensure competitive entry for retail and institutional investors.
Enviro Infra IPO: Peer Comparison based on P/E FY24
Book-Running Lead Managers
Hem Securities Ltd. is appointed as the book-running lead manager (BRLM) for the Enviro Infra Engineers IPO. As the leading manager, Hem Securities would oversee all key elements of the Enviro Infra IPO process. At the same time, the registrar for this IPO is Bigshare Services Pvt Ltd, and they are responsible for handling the administrative aspects of the offering.
Conclusion: Is the Enviro Infra IPO Worth Your Investment?
The Enviro Infra Engineers IPO gives investors a completely unique opportunity to invest in India’s developing water infrastructure sector. The company’s solid financial performance, robust order book, and alignment with national water conservation missions and schemes make it an attractive proposition. However, investors must take into account the risks associated with government dependency and rising expenses and costs.
For long-term horizon period investors looking for exposure to sustainable infrastructure and environmental solutions, this IPO could be a strategic addition to their portfolio. Along with the right stability and balance of sectoral growth and operational efficiency, Enviro Infra Engineers Ltd. gives promising opportunities for those who are inclined to align with India’s environmental transformation.