IPO listed on 29 Nov'24
Enviro Infra Engineers Ltd
Minimum Investment
₹ 14,948 / 101 shares
Grey market premium
₹ 38 (26% premium)
Issue price
₹ 148
Listing price
₹ 220
Listing gains
72 (49%)
Listing on
Nov 29, 2024
Our Verdict:
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- Enviro Infra Engineers Ltd (Enviro) has exhibited phenomenal growth in both revenue and profits over recent years. Going forward, the company is well-positioned to benefit from key Indian government initiatives such as Jal Jeevan Mission-Har Ghar Jal, AMRUT, the NAMAMI Gange Programme, and SWAJAL.
- In terms of valuation, the IPO is reasonably priced at a price-to-earnings (P/E) ratio of 18x based on FY24 earnings.
- With a robust pipeline of orders and a history of strong financial performance marked by industry-leading margins, Enviro seems well-prepared for sustained future growth. Given these factors, investors may consider subscribing to the IPO from a long-term perspective.
About the company
Founded in
19 Jun'09
Managing director
Manish Jain
- Enviro specializes in the design, construction, operation, and maintenance of Water and Wastewater Treatment Plants (WWTPs) and Water Supply Scheme Projects (WSSPs). The firm bids for state government and urban local body tenders to develop these projects on an EPC (Engineering, Procurement, and Construction) or HAM (Hybrid Annuity Model) basis.
- WWTPs include Sewage Treatment Plants (STPs), Sewerage Schemes (SS), and Common Effluent Treatment Plants (CETPs), while WSSPs cover Water Treatment Plants (WTPs), pumping stations, and pipeline networks for water supply.
STRENGTHS
- Robust Financial Growth: Enviro has shown exceptional growth, with its operational revenue, EBITDA, and net profit witnessing compound annual growth rates (CAGRs) of 81%, 84%, and 79% respectively, from FY22 to FY24.
- Healthy Return Ratios: Enviro’s financial performance is marked by healthy return metrics, with a Return on Equity (RoE) of 37%, significantly outperforming industry peers.
- Solid Order Book: As of June 30, 2024, Enviro boasted a substantial order book totalling Rs 1,906.28 crore, approximately 2.6 times its FY24 revenues, offering significant growth visibility for the medium term.
- Proven Project Execution Capability: Over the past seven years, Enviro has completed 28 WWTP and WSSP projects, including 22 with capacities of 10 MLD or more, across states like Gujarat, Rajasthan, Punjab, Haryana, Uttar Pradesh, Uttarakhand, and Chhattisgarh.
RISK FACTORS
- Cash Flow Challenges: Enviro reported negative cash flows from operations for the quarter ending June 30, 2024, as well as for the full fiscal year FY24. If this trend persists, it could significantly impact the company’s operational efficiency and financial stability.
- Contingent Liabilities: As of June 30, 2024, Enviro has substantial contingent liabilities amounting to Rs 258.82 crore that are not accounted for in the restated consolidated financial statements. If these liabilities materialize, they could adversely affect the firm’s financial position.
- Dependence on Government Contracts: Enviro's growth hinges on securing government contracts for WWTPs and WSSPs through competitive bidding in EPC and HAM models. Success depends on qualifying for tenders, project availability, timely awards, and competitive bids. Bid success rates were 58% in FY24, 41% in FY23, and 17% in FY22.
Issue details
Issue type
Mainstream
Issue size
₹ 650.43 crore
Fresh Issue
₹ 572.46 crore
OFS
₹ 77.97 crore
Price range
₹ 140 - 148
Lot size
101 shares
Issue Objective
Enviro intends to use the net proceeds from the fresh issue for the following purposes:
- Funding working capital requirements;
- Infusing capital into its subsidiary to construct a 60 MLD STP under the 'Mathura Sewerage Scheme' in Uttar Pradesh;
- Repaying or prepaying, in full or part, certain outstanding borrowings;
- Supporting inorganic growth through potential acquisitions; and
- General corporate purposes.
Dates
Bidding open
22 Nov'24
Bidding close
26 Nov'24
Allotment date
27 Nov'24
Refund date
28 Nov'24
Listing
29 Nov'24
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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