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7 October 2023

EMS Limited IPO: Powering India's Infrastructure

Introduction:

EMS Limited, formerly known as EMS Infracon, is a dynamic player in the infrastructure sector. Established in 2012, the company specializes in providing comprehensive solutions for water and wastewater collection, treatment, and disposal services.

IPO Snapshot:

EMS Limited successfully conducted its IPO, raising Rs 321.24 crores. This offering consisted of a fresh issue of 0.69 crore shares worth Rs 146.24 crores and an offer for sale of 0.83 crore shares valued at Rs 175.00 crores. The IPO subscription window was open from September 8, 2023, to September 12, 2023. Allotment took place on September 15, 2023, and the shares were listed on BSE and NSE on September 21, 2023. The price band for the IPO was set at ₹200 to ₹211 per share, with a minimum lot size of 70 shares and a minimum investment requirement of ₹14,770 for retail investors.

Key Players:

Khambatta Securities Limited acted as the book running lead manager for the EMS IPO, while Kfin Technologies Limited was appointed as the registrar for the issue.

Stock Performance:

As of October 6, 2023, EMS Limited's stock was trading at ₹323.15, marking a 6.16% increase. The stock had an opening price of ₹313.05, reached a high of ₹333.40, and a low of ₹310.00. The previous closing price was ₹304.40, with a total traded value of 43,43,638 shares.

Ownership Structure:

Pre-issue shareholding was at 96.71%, and post-issue, it stands at 84.68%.

Financial Performance:

EMS Limited showcased a robust financial performance. As of March 31, 2023, the company's assets stood at ₹638.72 crores, with revenue reaching ₹543.28 crores. The profit after tax was ₹108.67 crores, and the net worth of the company was ₹487.83 crores, with reserves and surplus of ₹443.45 crores. The total borrowing as of that date amounted to ₹45.40 crores.

Performance Indicators:

Key performance indicators for the EMS IPO included a post-issue P/E (Price-to-Earnings) ratio of 10.78 and a Market Capitalization of ₹1171.7 crores.

Objectives of the Issue:

The net proceeds from the IPO were allocated for the following purposes:

1. Funding working capital requirements.
2. General corporate purposes.

Expert Opinion:

Recommended that investors consider this IPO for short to long-term rewards. The company's strong performance in FY23, along with its order book worth Rs 1845 crores and an accelerated growth trajectory, positions it as an attractive investment opportunity.

Subscription Status:

The EMS IPO received significant investor interest, with a subscription rate of 76.21 times as of September 12, 2023. Retail investors showed notable interest with a subscription rate of 30.55 times. Non-Institutional Investors (NII) also participated actively, with a subscription rate of 84.39 times. In the NII category, bids above ₹10 lakhs (bNII) had a subscription rate of 83.15 times, while bids below ₹10 lakhs (sNII) were subscribed 86.87 times. The Qualified Institutional Buyer (QIB) category had an impressive subscription rate of 149.98 times.

Conclusion:

EMS Limited is a key player in India's infrastructure development, focusing on water and wastewater solutions. Before considering this IPO, investors should conduct a thorough analysis of the company's growth prospects, financial performance, and business model. Additionally, it's essential to align your investment decisions with your investment goals and risk tolerance.

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