Enviro Infra Engineers IPO Day 2: GMP Jumps, Subscription Status, Review, and Insights

Introduction

The Enviro Infra Engineers IPO has become a focal point for investors in the Indian stock market. With a positive response from participants and a steady rise in the Grey Market Premium (GMP), this initial public offering (IPO) has sparked curiosity among retail and institutional investors. Here’s a comprehensive guide to the IPO’s subscription status, GMP trends, expert reviews, and whether you should consider applying.

What is Enviro Infra Engineers IPO?

The Enviro Infra Engineers IPO is an opportunity for investors to own a stake in a growing company specializing in wastewater treatment and water supply projects. The public issue, valued at ₹148 per equity share (upper price band), aims to raise capital to fund its projects, strengthen its financial position, and fuel expansion.

Key Dates

• IPO Opening Date: November 22, 2024
• IPO Closing Date: November 26, 2024
• Price Band: ₹144 to ₹148 per equity share
• Lot Size: 100 shares per lot

Key Highlights of Enviro Infra Engineers IPO

1. Robust Growth: Between FY22 and FY24, Enviro Infra Engineers achieved a revenue CAGR of 115.6%, EBITDA CAGR of 107.3%, and PAT CAGR of 101.1%.
2. Strong Order Book: As of June 30, 2024, the company boasts an order book worth ₹19,063 million, providing revenue visibility for over 30 months.
3. Focused on Sustainability: With its involvement in government-led initiatives, Enviro Infra Engineers is poised to play a vital role in India’s water infrastructure development.

Enviro Infra Engineers IPO GMP Today

The Grey Market Premium (GMP) reflects investor sentiment ahead of a stock’s listing. As of November 24, 2024, the Enviro Infra Engineers IPO GMP stands at ₹53, showing a significant increase from ₹31 on Friday. This uptick suggests strong demand for the shares in the grey market.

Recent GMP Trends:

• Day 1 (November 22): ₹23
• Day 2 (November 23): ₹31
• Day 3 (November 24): ₹53

Reasons for GMP Growth

1. Positive Market Sentiment: A trend reversal on Dalal Street has boosted overall investor confidence.
2. Strong Subscription Numbers: High interest from retail and institutional investors has contributed to the rising GMP.
3. Sector Potential: The water and wastewater treatment sector is gaining attention due to increasing government focus and funding.

Enviro Infra Engineers IPO Subscription Status

The subscription numbers highlight the growing interest in the Enviro Infra Engineers IPO. By Day 2, the IPO had been oversubscribed multiple times across investor categories:

• Total Subscription: 7.54 times
• Retail Investors: 5.75 times
• Non-Institutional Investors (NII): 19.02 times
• Qualified Institutional Buyers (QIB): 2.05 times

This strong response is an indicator of confidence in the company’s financials and growth prospects.

Expert Review of Enviro Infra Engineers IPO

Indsec Securities Analysis

Indsec Securities provided a detailed analysis, assigning a “Subscribe for Long Term” rating.

• Valuation: At an upper price band of ₹148, the IPO is valued at an FY24 EV/EBITDA of 16.7x, higher than its peers (average: 14.6x).
• Order Book Strength: A robust order book worth ₹19,063 million ensures steady revenue for over 30 months.
• Growth Potential: The company’s growth aligns with the rollout of government tenders in wastewater treatment.

However, subdued tendering activity in H1FY25 due to general elections is noted as a potential risk.

Swastika Investment View

Swastika Investment has also rated the IPO positively, recommending a “Subscribe” tag.

• Strong Balance Sheet: The company’s financials reflect significant revenue and profit growth.
• Fair Valuation: The IPO is priced reasonably compared to its peers.
• Sustainable Expansion: Backed by a strong order book, the company is well-positioned to capitalize on future opportunities.

Pros and Cons of Enviro Infra Engineers IPO

Pros:

1. Growth Trajectory: Impressive revenue and profit growth rates over the past three years.
2. Market Potential: Increasing focus on water and wastewater treatment projects driven by government initiatives.
3. Long-Term Revenue Visibility: A strong order book supports sustainable growth.

Cons:

1. Valuation Concerns: Priced higher than industry peers on EV/EBITDA metrics.
2. Market Dependency: Performance relies heavily on the timely rollout of government tenders.
3. Short-Term Risks: Subdued activity in H1FY25 may impact near-term growth.

Should You Apply for Enviro Infra Engineers IPO?

Investors should weigh their decisions based on their risk appetite and investment horizon:

• For Long-Term Investors: The company’s growth potential, supported by a strong order book and sectoral opportunities, makes it an attractive choice.
• For Short-Term Investors: The rising GMP indicates potential listing gains, but valuation concerns might cap significant upside.

How to Apply for Enviro Infra Engineers IPO

1. Online Through UPI: Use your stockbroker’s trading app or platform to apply.
2. Net Banking ASBA: Apply directly through your bank’s net banking portal using the Application Supported by Blocked Amount (ASBA) facility.
3. Offline: Submit a physical application form through your broker or nearest IPO collection center.

Conclusion

The Enviro Infra Engineers IPO represents an opportunity to invest in a company poised for growth in a critical infrastructure sector. With a rising GMP, strong subscription figures, and positive reviews from experts, the IPO has generated significant buzz among investors.

However, the valuation metrics and dependency on government tendering processes introduce some risks. Investors are advised to approach this IPO with a long-term perspective, focusing on its potential to deliver sustainable returns.

By keeping an eye on subscription updates and GMP trends, you can make an informed decision about whether to participate in this promising public offering.

FAQs

1. What is the Enviro Infra Engineers IPO GMP today?
The current GMP is ₹53, indicating a strong demand for the shares in the grey market.

2. When does the Enviro Infra Engineers IPO close?
The IPO closes on November 26, 2024.

3. How can I apply for the Enviro Infra Engineers IPO?
You can apply online through your stockbroker or bank’s ASBA facility, or offline via a physical form.

4. Is the Enviro Infra Engineers IPO a good investment?
Experts have recommended a “Subscribe for Long Term” rating, highlighting its growth potential and strong order book.

5. What are the risks associated with this IPO?
Valuation concerns and dependency on government tendering activity are key risks to consider.

This in-depth analysis of the Enviro Infra Engineers IPO ensures you are well-informed before making your investment decision. Stay updated for more insights and trends in the Indian IPO market.