Enviro Infra Engineers IPO: Price Band, Financials, Risks — All You Need To Know

Enviro Infra Engineers Ltd. is set to launch its initial public offering on Nov. 22, with a price band of Rs 140 to Rs 148 per share. Investors can place bids for a minimum of 101 shares, or in multiples thereof.

The Delhi-based company’s IPO will consist of a fresh issue of 3.86 crore equity shares and an offer-for-sale of 52.68 lakh shares by its promoters, as per the red herring prospectus filed with the Securities and Exchange Board of India. With a total of over 4.39 crore shares on offer, Enviro Infra Engineers aims to raise Rs 650.43 crore through the public issue.

• Issue opening date: Nov. 22

• Issue closing date: Nov. 26

• Issue price: Rs 140-148 per share

• Fresh issue size: Rs 572.46 crore

• OFS size: Rs 77.97 crore

• Total issue size: Rs 650.43 crore

• Market value at the upper end of price band: Rs 2,598 crore

• Lot size: 101 shares

• Allotment: About 50% of the issue size has been reserved for qualified institutional buyers, 15% for non-institutional buyers and the remaining 35% for retail investors.

• Out of the proceeds from the fresh issue, Rs 181 crore will be used to meet working capital requirements.

• Rs 120 crore will be used for repaying debt.

• The company will infuse Rs 30 crore into its subsidiary EIEL Mathura Infra Engineers Pvt. to build a 60 MLD sewage treatment plant in Uttar Pradesh's Mathura.

• Besides, a portion will be used to fund inorganic growth through acquisitions and general corporate purposes.

Enviro Infra Engineers is engaged in designing, constructing, operating and maintaining water and wastewater treatment plants, and water supply scheme projects for government authorities and bodies.

The treatment process installed by the company at most of the STPs is zero liquid discharge-compliant and the treated water can be used for horticulture, washing, refrigeration, and other process industries.

The company has completed 26 wastewater treatment plants, and water and sanitation sector projects across India in past the seven years, which includes 20 projects with 10 MLD capacity and above as on Dec. 31, 2023.

Enviro Infra Engineers' total income for the nine months period ended Dec. 31, 2023 was Rs 4,285 crore, as per the latest financial records shared in the pre-IPO documents. In fiscal 2023, revenue stood at Rs 3,381 crore, higher than Rs 2,235 crore a year ago.

The company's profit rose from Rs 345 crore in fiscal 2022 to Rs 550 crore in fiscal 2023. However, it posted a loss of Rs 86 crore in 2021.

• Reduction in budget allocation for water treatment could impact government projects.

• Loss of key employees may negatively affect project execution.

• Insufficient cash flows may hinder working capital requirements and operations.

• Failure to capitalise on government policy initiatives in water or wastewater treatment.

• Challenges in implementing new “waste to energy” initiatives, such as solar power, may impact growth.

• Rising construction material, labour costs, and contract charges could affect business performance.

• Negative past cash flows may continue, impacting future cash flow and financial stability.

Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisers and read red herring prospectus thoroughly before placing bids.