Enviro Infra Engineers which recently floated into the stock market opened at 49% higher than the IPO price of Rs 148 . Currently it floated at Rs 220 on National Stock Exchange (NSE) and Rs 218 on Bombay Stock Exchange (BSE) when it first began trading. This promising start has led many investors to consider their options: Should they continue to operate with these shares or should they book profits?
Enviro Infra IPO details
The company’s Rs 650-crore issue received tremendous response during the subscription period from November 22 to November 26 with a subscription rate of 89.90 times. Chase’s demand was high in the qualified institutional buyer segment, which subscribed 157.05 times.
Enviro Infra focuses to provide end to end solutions for water and industrial effluent treatment plants, Sewage management systems, Water supply Distribution and augmentation solutions. The company encourages effective sustainable infrastructure for its extraction undertakings and operates on zero liquid discharge. It is such commitment makes water treated water to be reused for some purpose such as watering flowers and industrial washing.
Factors in Success of the Listing
The strong debut of Enviro Infra can be attributed to several factors:
Market Demand
This overwhelming demand during the IPO subscription period simply shows that investor place a lot of confidence on the company’s business model and its growth prospects.
Sustainable Infrastructure
For example, with the growing concern for the environment, there is the likelihood that firms such as Enviro Infra, whose business is based on environment-friendly solutions, will attract more Investment.
Track Record
Successful project execution in Enviro Infra projects has formed the confidence of investors.
Looking at this question, a lot of investors ask themselves whether they should hold their stocks or book a profit.
Although the shares of Enviro Infra have been listed the first time, the investors experience the significant question of whether they should continue their stakes or take their profit. In regard to this there is advised prudent strategy with the stress on the regular appraisal of the firm’s results.
Factors to Consider
Project Execution
Speaking to Shivani Nyati, the Head of Wealth at Swastika Investmart, the company performance for the years to come will depend with the extent of successful implementation of projects. In my opinion, investors should have a keen interest in the handling of current and future projects in Enviro Infra.
Regulatory Developments
The Indian infrastructure industry has to face several regulatory risks. They continue however that any changes in regulations could have an effect on the operations, and thus the revenues, of Enviro Infra.
Competition
This market is competitive since there are many players who are bidding for the market in water and wastewater treatment. It is also important to know the competitive forces that may be posing high threats to the future survival of Enviro Infra.
Financial Performance
The financial analysis of the company should be carried out to check the efficiency and viability of the enterprise to generate high revenues and maintain high profitability. The separation of IPO funds—Rs 181 crore for working capital, Rs 100 crore for repaying debt, and Rs 30 crore for a sewage treatment plant project will be useful in its funding plan.
Expert Opinions
There is also advice that investors should keep monitoring the kind of performance which the stock is giving. Taking Nyati into consideration its suggests that it is wise for the holders to hold on the stock and set a stop loss of Rs 200. This approach enables the investors to keep their money secure but at the same time stay involved with a possibly very lucrative business.
Lecture: Future Possibilities of Enviro Infra
Future prospects of Enviro Infra are therefore dependent on the management’s capacity to identify and exploit prospects in the sustainable infrastructure market. The general orientation to the environmental questions and the necessity of innovations developed by Enviro Infra in water management contribute to its further advancement.
Market Trends
Especially, with the increase of urbanization, the need in efficient water treatment and management is likely to remain high. Some of these trends are beneficial to Enviro Infra which is experienced in this line of business.
Government Initiatives
The central Indian government has over the years begun implementing strategies and programs which aim at enhancing water management and sanitation. As seen above, Enviro Infra stands to benefit from these initiatives and thus, the company’s growth will escalate even further than previously estimated.
Technological Advancements
The need to provide innovations in water treatment solutions can effectively improve the competitive advantage of the company. Keeping abreast to such technologies is crucial to retaining the leadership within this industry.
Conclusion
The enthusiasm shown by investors that pushed Enviro Infra to a good Market debut signifies that the market provides potential for sustainable infrastructure projects. As short-term returns become achievable, the investors are inclined to lock in the respective profits although, the subsequent analysis of the specifics in the company and the market environment points to the SJ may be a better option for action.
Investors must pay attention and carefully watch how things unfold in the project delivery, regulatory environment and market competition in the water treatment industry. By this perspective, while the economic growth and execution risks point towards making long term investment into Enviro Infra a highly dangerous proposition, if the right approach is adopted then the organization could provide a good scope to offer high returns which would make it an attractive proposition for those investors who are willing to look beyond short term profits into the quality and effectiveness of the sustainable infrastructures being built in the future.
All in all, analyzing the case of Enviro Infra up to now, Charlson’s realizable expectation seems comparatively high, it is recommended that investors should not only focus on the first year’s operating results of Enviro Infra, but also concern the background and possible risks. Perhaps, sustaining shares with sound exit advantage may prove to be the right approach to the overall management of the growth prospects of the company.
FAQs
1. What was the IPO price of this Enviro Infra?
The issue of Enviro Infra opened at a problem of Rs. 148, and made its debut in the bourses at Rs 220.00 on NSE a bellwether of nearly 49 per cent.
2. Why did enviro infra floated its shares slightly after listing of the shares ?
However, the initial rising trend is followed by slightly less shares, and this can be explained by the fact some investors are cashing in on profits and readjusting up and down throughout the day.
3. Which factors should investors pay attention to so that they will be able to know when to hold on or when to sell?
It suggests investors look at the company’s project execution capabilities, progression of regulations in current industries relevant to Jubilant Life, competition existing in the industry, and the overall financial status of the company.
4. What industries are of most importance to the company?
Enviro Infra currently provides complete solutions for turnkey projects largely in water and wastewater treatment, sewerage systems and water supply schemes and solutions which are environment friendly.
5. IPO – what are the proceeds to be used for?
Out of the IPO size of Rs 650 crore, Rs 181 crore has been proposed for working capital, Rs 100 crore proposed for repayment of existing avenue loans and Rs 30 crore for buying out a sewage treatment project in Mathura for which the company’s team has been finalising a joint venture partner.
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