EMS lists at a 34% premium but slightly below grey market expectations

• The issue received good interest from non-institutional and retail investors.
• It has already raised ₹96.37 crore from anchor investors.
• The net proceeds will be utilised to fund working capital and general corporate purposes.
  

Sewerage solution provider EMS listed on exchanges at a 34% premium to its IPO issue price. The company’s ₹321 crore initial public offer (IPO) was subscribed 76 times the shares on offer with aggressive bidding by qualified institutional buyers or QIBs. The stock listed at ₹282/share versus an issue price of ₹211/share on the NSE.

It also received good interest from non-institutional and retail investors. The price band was fixed at ₹200-211 per equity share.

As per market watchers, EMS shares before the listing were available at a premium of ₹90 in grey market, i.e. the expectation was a listing price of around ₹301 ( ₹211 + ₹90), or a 42% uptick to the IPO price band.

EMS raised ₹96.37 crore from anchor investors like NAV Capital Emerging Star Fund, Abakkus Diversified Alpha Fund, Saint Capital Fund, Meru Investment Fund, BofA Securities Europe and Morgan Stanley Asia (Singapore).



Source: Press release


EMS IPO comprises a fresh issue worth ₹146 crore and offer for sale (OFS) portion consists of 82,94,118 shares of ₹10, which aggregates to ₹175 crore. Ramveer Singh is the promoter who is also a selling shareholder.

The net proceeds from the fresh issue will be utilised to fund working capital requirements of the company, and general corporate purposes.

About the company

The company is a sewerage solution provider with water supply system, water and waste treatment plants, electrical transmission and distribution and more. It has identified Va Tech Wabag as its listed peer.

It also executes road and allied projects, operates and maintains wastewater scheme projects (WWSPs) and water supply scheme projects (WSSPs) for government authorities. WWSPs include sewage treatment plants (STPs) along with sewage network schemes and common effluent treatment plants (CETPs).

WSSPs include water treatment plants (WTPs) along with pumping stations and laying of pipelines for supply of water. Its revenues went up by 49% in FY23 from FY22 and its net profit went up by 17.8% in the same period.

The company is in a capital intensive business and depends on competitive bidding to gain business. Any change in budgetary allocation to the sector can also adversely affect its business, it said in its RHP.

The allotment of shares is expected to be finalised on September 15, and is likely to be listed on BSE, NSE on September 21.