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A Water and Wastewater Solutions Provider

Enviro Infra Engineers Ltd (EIEL) designs, constructs, operates, and maintains Water and Wastewater Treatment Plants (WWTPs) and Water Supply Scheme Projects (WSSPs) for government bodies in India. Established in 2009 and headquartered in Delhi , the company has developed 28 WWTPs and WSSPs, focusing on projects with capacities of 10 MLD (Million Liters per Day) or more across various states of India. EIEL bids for state & local government projects and forms joint ventures to enhance its technical and financial capabilities. Enviro Infra undertakes projects based on Engineering, Procurement and Construction (EPC) or Hybrid Annuity Model (HAM) contracts.

* The Global Water and Wastewater Treatment market is expected to grow at a CAGR of 6.1%, reaching $522 billion by 2033 from $306 billion in 2024. India's rapid population growth & urbanization increased the demand for potable water, benefiting companies like EIEL through the need for improved treatment and distribution systems.

* EIEL executes projects funded by central and state governments under schemes like AMRUT, National Mission for Clean Ganga, and Jal Jeevan Mission. The company also plans to venture into waste-to-energy initiatives and expand geographically to East and South India.

* EIEL’s revenue has increased from Rs.338.1cr in FY23 to Rs.728.9cr in FY24, which has grown by 116%. The net profit has increased by 101% from Rs.55.3cr in FY23 to Rs.108.6cr in FY24.

* In Q1FY25, the company earned a revenue of Rs.205.2cr and a net profit of Rs.30.0cr. Enviro Infra Engineers Ltd has an EBITDA margin of 25%, which is superior compared to its peers and a healthy net profit margin of 15% in the same period.

* EIEL’s order book has increased by 42%, from Rs.1,496.7cr in FY23 to Rs.2,125.6cr in FY24. The company maintained an order book of Rs.1,906.3cr in June 2024.

* The order book to sales ratio for FY24 stood at 2.6x, providing revenue visibility for the next 2 to 3 years.

* The EIEL’s ROE stood at 37.4% in FY24, which is superior compared to its peers. The debt-to-equity ratio of the company has increased from 0.5x in FY23 to 0.95x in Q1FY25. But post IPO it will reduce to 0.2x, indicating improved financial leverage.

* The company aims to strengthen its position by scaling project capacities to 50–200 MLD for Sewage Treatment Plants (STPs) and 20–50 MLD for Common Effluent Treatment Plants (CETPs). The high-capacity projects provide competitive advantages, including better margins, economies of scale, and efficient resource utilization.

* At the upper price band of Rs.148, EIEL is available at a P/E of 23.9x (FY24), which appears to be fairly priced compared to listed peers. The ambitious initiatives of the Indian government, such as the Jal Jeevan Mission-Har Ghar Jal, AMRUT, the NAMAMI Gange Programme, and SWAJAL, present significant opportunities for the company's future growth. With a robust order pipeline and consistent financial performance featuring industry-leading margins, the company is well-positioned for future success. We recommend “subscribe” rating for the issue for medium- to long-term investment.

Purpose of IPO

The IPO consists of fresh issue of Rs.572.46cr and an OFS of Rs.78cr. The proceeds from its fresh issuance will be utilised for (i) working capital Rs.181cr (ii) debt repayment Rs.120 cr (iii) capex Rs.30cr (iv) general corporate purposes.

Key Risks

* Its significant reliance on government contracts (~100% of FY24 revenue) makes it highly dependent on government spending in the water treatment sector.

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SEBI Registration Number: INH200000345