Enviro Infra Engineers IPO Day 2: Transition to GMP; subscription status, review, apply or not?

Enviro Infra Engineers IPO: The initial public offering (IPO) of Enviro Infra Engineers Limited commenced on November 22 and will be open for trading until November 26, 2024. This means investors have two days to apply for the Enviro Infra Engineers IPO. According to Enviro Infra Engineers’ IPO subscription status after the first day of trading, the public issue received decent response from investors as double the number of shares on offer were booked. Meanwhile, following a trend reversal in the Indian stock market on Friday and strong investor reaction in the Indian primary market, the share price of Enviro Infra Engineers rose in the gray market. According to stock market observers, Enviro Infra Engineers Limited shares are trading at a premium of ₹53 today on the gray market.

Today Enviro Infra Engineers IPO GMP

As mentioned above, today Enviro Infra Engineers IPO GMP (Grey Market Premium) ₹53, that is ₹22 higher than Friday’s GMP ₹31. In the last four days, GMP Enviro Infra Engineers IPO has risen from ₹23 to ₹53, which deserves praise, observers say. They noted that the trend reversal on Dalal Street and the strong investor response are some of the major reasons behind the rise in gray market sentiment towards the Enviro Infra Engineers IPO.

Enviro Infra Engineers IPO Subscription Status

By 10:12 am on the second day of trading, the book assembly issue was booked 3.00 times, the retail portion 2.37 times, the NII segment 5.70 times, and the QIB segment 2.05 times.

Enviro Infra Engineers IPO Review

On whether Enviro Infra Engineers IPO is good or bad for primary market investors, Indsec Securities said: “At the upper end of the price range ₹148, the IPO is valued at FY24 EV/EBITDA of 16.7x, compared to an average of 14.6x for its listed peers. During FY22-24, the company’s revenue/EBITDA/PAT grew at a CAGR of 115.6%/107.3%/101.1% respectively. The bid to order conversion ratio has averaged 39% over the last three fiscal years. The company’s growth is due to the timely execution of tenders for government projects for wastewater treatment and water supply. However, tender activity was subdued in the first half of FY25 due to general elections and is expected to resume in the second half of FY25. Despite this, their position in the order book as of June 30, 2024 remains strong at ₹19,063 million, providing revenue visibility over 30 months based on FY24 revenue. The project implementation period for the current order portfolio is 18-30 months. As noted above, the issue is valued higher than its listed peers on a FY24 EV/EBITDA basis. This, coupled with sluggish tender activity, limits upside potential. We assign a “Long Term Subscription” rating to the IPO.

Swastika Investment has also given the book launch a ‘follow’ tag, saying, “The company is expanding its presence with new projects and is backed by a strong order book. The company’s balance sheet shows that the company has managed to register strong growth in revenue and profit. In addition, the book release is offered at a fair price that provides a reasonable valuation compared to similar products. Therefore, we encourage investors to apply for a public issue while maintaining a long-term perspective.”

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