Enviro Infra Engineers files draft papers with SEBI to mop up funds via IPO

Enviro Infra Engineers, specialising in sewage treatment plants and systems, has submitted draft papers to the capital markets regulator, the Securities and Exchange Board of India (SEBI), to raise funds via an initial public offering (IPO).

According to the draft red herring prospectus (DRHP), the proposed IPO is a mix of fresh issuance of 4.42 crore shares and an offer for sale (OFS) of 52.68 lakh equity shares by promoter.

Presently, 93% stake in the company is held by promoters.

Proceeds from the IPO to the tune of ₹100 crore will be used for debt repayment, ₹30 crore to be infused into a subsidiary, EIEL Mathura Infra Engineers, to construct a 60 million litres per day sewage treatment plant at Mathura, Uttar Pradesh, ₹181 crore to meet the working capital requirements and a portion for general corporate purposes.

About Enviro Infra Engineers

Enviro Infra Engineers designs, constructs, operates and maintains water and wastewater treatment plants and water supply scheme projects for government bodies.

The company installs zero liquid discharge-compliant treatment processes at most sewage treatment plants (STPs), producing treated water usable in horticulture, refrigeration, washing, and other industrial processes.

The sole book-running lead manager for the issue is Hem Securities.

Enviro Infra Engineers IPO: Strengths

• In-house design, engineering and execution team
• Strong order book across the country
• Strong execution capability
• Experienced management

Enviro Infra Engineers IPO: Risks

• The company bids for water supply scheme projects and water and wastewater treatment plants, which are funded by the government. Failure to secure bids can impact the business.
• Higher working capital requirement
• Changes in government policies can impact business.