Shares of specialised water and wastewater management company Enviro Infra Engineers made a stellar debut on the stock exchanges on Friday, November 29, 2024. On the BSE, the stock was listed at Rs 218, reflecting a premium of Rs 70 or 47.30 per cent over its issue price of Rs 148.
On the National Stock Exchange (NSE), Enviro Infra shares had an even stronger debut, opening at Rs 220 apiece. This provided IPO investors with a return of Rs 72 per share, translating to a gain of 48.65 per cent on the allotment price.
The listing performance was consistent with grey market predictions. Ahead of its debut, the company’s unlisted shares were trading at a premium of Rs 57 over the IPO price, indicating positive sentiment and a strong debut on the bourses, according to sources tracking grey market activity.
Enviro Infra’s listing was above our expectations,” said Prashanth Tapse, senior VP (Research), Mehta Equities. “This shows the demand for theme-based sectors, and water and wastewater management companies have a bright future.”
According to Tapse, the healthy listing gain is justified due to reasonable IPO valuation, sector-wise focus, and the increasing relevance of water and wastewater infrastructure treatment by the government and industries, along with 2.5x order book visibility.
“Considering all the parameters and improving market sentiments, conservative investors who were allotted shares can think of booking profits due to the ongoing market volatility scenario,” Tapse continued. “While risk-takers should consider holding the company for the long-term, despite knowing the short-term volatility.”
For non-allotted investors, he advised accumulating shares if there are dips post-listing.
This outstanding performance was driven by the company’s strong fundamentals, strong investor interest, and the positive sentiment surrounding the water and wastewater treatment sector, said Shivani Nyati, Head of Wealth at Swastika Investmart.
According to her, the company’s focus on sustainable infrastructure and its strong track record in executing projects have contributed to this impressive listing. However, investors should remain cautious and monitor the company’s performance closely, considering factors such as project execution risks, regulatory changes, and competition in the sector, she added.
“While the initial listing is promising, long-term success will depend on Enviro Infra’s ability to capitalise on its growth opportunities and deliver strong financial performance,” Nyati said. As of now, she advised investors to hold their position by keeping a stop-loss at around Rs 200.
The Rs 650.43 crore offering of Enviro Infra, which comprised a fresh issue of 38,680,000 shares and an offer for sale of 5,268,000 shares with a face value of Rs 10, ended for subscription on Tuesday, November 26, 2024, receiving an overwhelming response from investors as it was oversubscribed by 89.90 times, as per BSE data. The Enviro Infra IPO was available at a price band of Rs 140-148 per share, with a lot size of 101 shares.
Enviro Infra intends to utilise the proceeds from the Fresh Issue towards funding working capital requirements, infusing funds into its subsidiary, EIEL Mathura Infra Engineers, to build a 60 MLD STP under the project titled ‘Mathura Sewerage Scheme’ at Mathura in Uttar Pradesh through Hybrid Annuity-Based PPP Mode, repayment/prepayment, in full or in part, of certain outstanding borrowings, funding inorganic growth through unidentified acquisitions, and for general corporate purposes.
Established in 2009 and headquartered in Delhi, Enviro Infra Engineers (EIEL) designs, constructs, operates, and maintains Water and Wastewater Treatment Plants (WWTPs) and Water Supply Scheme Projects (WSSPs) for government bodies in India.
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