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All you need to know on Enviro Infra Engineers and its peers ahead of its listing
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5 min read | Updated on November 28, 2024, 10:10 IST
SUMMARY
The Enviro Infra Engineers IPO received a massive response from the public with a subscription over 89 times, indicating investor's strong interest in the water and wastewater treatment sector. Here's a peer-to-peer comparison of companies based on business segments, and key financial and operation indicators.
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Enviro Infra Engineers witnessed robust demand with subscription of nearly 90x the issue size.
Enviro Infra Engineers Limited, a leading company engaged in the water and wastewater treatment sector, launched its ₹650.43 crore IPO with a price band of ₹140 - ₹148 per share. The issue, comprising a fresh issue of ₹572.46 crore and an offer for sales of ₹77.97 crore was open from November 22 to November 26, 2024. The listing of Enviro Infra Engineers is scheduled for Friday, November 29, 2024.
India’s water and wastewater sector is growing rapidly, driven by rising water demand and government initiatives to conserve water and provide access to every citizen; projects include Jal Jeevan Mission, Clean Ganga and others. As per a report by Frost & Sullivan, the sector is expected to grow up to $2.08 billion by 2025 from $1.31 billion in 2020, growing at a compound annual growth rate (CAGR) of 9.7%. Hence advanced treatment technologies and infrastructure development offer opportunities for both public and private players in addressing the water challenge.
Established in 2009, the company specialises in designing, constructing, and maintaining water and Wastewater treatment infrastructure, including Sewage Treatment Plants (STPs), Water Treatment Plants (WTPs), and related projects. With a strong order book of ₹1,906.28 crore as of June 2024 and a proven track record of completing 28 large-scale projects, Enviro Infra Engineers has displayed strong execution capabilities.
The company has shown significant financial growth, with FY24 revenue surging by 116% to ₹738 crore and profit after tax doubling to ₹108.57 crore compared to FY23. In Q1FY25, earnings continued the momentum with ₹207.46 crore in revenue and ₹29.97 crore in profit after tax.
However, Enviro Infra Engineers faces competition from listed companies such as VA Tech Wabag Ltd, Ion Exchange India Ltd, EMS Ltd, and Vishnu Prakash R Punglia Ltd, who are players in the water and wastewater treatment market. Here’s a brief comparison of Enviro infra engineers with its peers
Peer-to-Peer Comparison for Enviro Infra Engineers Ltd
| Financial Metrics | Enviro Infra Engineers* | EMS | ION Exchange | Va Tech Wabag | Vishnu Prakash R Punglia |
|---|---|---|---|---|---|
| Market Capitalisation (in ₹ Crore) | 2,103 | 4,453 | 9,436 | 10,537 | 3,603 |
| EV/EBITDA (Times) | 12.5 | 18 | 26.4 | 24.1 | 17.7 |
| P/E (Times) | 19.8 | 26 | 43.8 | 40.5 | 29.2 |
| (Source:Screener.in) (Note - *Enviro Infra Engineers figures are based on upper price band) |
The Enviro Infra Engineers IPO based on a valuation point appears attractive, considering its significant role in the trending sector like water management with its strong financials and robust o rder book. The company's long-term outlook remains optimistic, the significant investors' interest in the IPO can be noted from 89 times subscription.
| Financial KPIs | Enviro Infra Engineers | EMS | ION Exchange | Va Tech Wabag | Vishnu Prakash R Punglia |
|---|---|---|---|---|---|
| Revenue from operations (₹ Crore) | 728.915 | 793.31 | 2347.85 | 2856.4 | 1,473.86 |
| EBITDA (₹ Crore) | 169.32 | 203.84 | 273.49 | 376.8 | 209.9 |
| Operating EBITDA Margin (% of Revenue from Operations) | 23.23% | 25.70% | 11.65% | 13.19% | 14.24% |
| PAT (₹ Crore) | 110.54 | 152.38 | 195.73 | 245.6 | 122.215 |
| PAT margins (%) | 15.17% | 19.21% | 8.34% | 8.60% | 8.29% |
| Net Worth (₹ Crore) | 292.18 | 798.13 | 1,017.91 | 1,818.65 | 721.064 |
| Return on Net Worth (%) | 37.83% | 19.09% | 19.23% | 13.50% | 16.95% |
| Net Debt/Equity (Times) | 0.8 | 0.002 | 0.04 | 0.11 | 0.55 |
| Interest Coverage (Times) | 7.53 | 50.1 | 23.5 | 5.58 | 4.09 |
(Source: Company RHP)
Business Segments - Enviro Infra Engineers is in the business of designing, construction, operation and maintenance of Water and Wastewater Treatment Plants (WWTPs) and Water Supply Scheme Projects (WSSPs) for government authorities.
WWTPs include Sewage Treatment Plants (STPs), Sewerage Schemes (SS) and Common Effluent Treatment Plants (CETPs) while WSSPs include Water Treatment Plants (WTPs) along with pumping stations and laying of pipelines for the supply of water. The treatment process installed at most of the STPs and CETPs is Zero Liquid Discharge (ZLD) compliant and the treated water can be used for horticulture, washing, refrigeration and other process industries.
Apart from Enviro Infra Engineers, Va Tech Wabag and Ion Exchange offer services in ZLD, conventional solutions and recycling solutions. While Vishnu Prakash Pungalia and EMS offer conventialn services only.
Conclusion The Enviro Infra Engineers IPO received a massive response from the public, with subscriptions over 89 times. The demand for IPO was received from all categories with 24.48 times in retail, 157.05 times in QIB, and 153.80 times in NII. The competition between companies depends on various factors, including the type of project, total contract value, potential margins, complexity, location of the project and risks relating to revenue generation.
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