Effwa Infra & Research Ltd has emerged as a prominent player in the field of engineering, consulting, procurement, construction, and integrated project management services. Founded in 2014, the company has made significant strides in addressing critical issues related to water pollution control, wastewater and industrial effluent treatment, solid waste treatment and disposal, aeration systems, hazardous waste management, and water treatment plants. The recent success of its initial public offering (IPO) underscores its growing influence and investor confidence in its future prospects.
The Effwa Infra & Research Ltd IPO: A Resounding Success
The initial public offering (IPO) of Effwa Infra & Research Ltd opened for public subscription on July 5, 2024, and witnessed an overwhelming response from investors. The IPO, categorized as a Small and Medium Enterprise (SME) IPO. Moreover, It was heavily oversubscribe on the very first day of bidding, reflecting the strong demand for the company’s shares. The IPO remained open until July 9, 2024, offering investors ample time to participate in this lucrative opportunity.
Effwa Infra & Research Ltd opted for a book-built issue, which allowed for the determination of the issue price through investor demand. The price band for the IPO is set between ₹78 and ₹82 per share. At the upper end of the price band, the company aimed to raise ₹51.27 crore. The IPO consisted of a fresh issue of 53.17 lakh equity shares, worth ₹43.60 crore, and an offer-for-sale (OFS) of 9.36 lakh shares, amounting to ₹7.68 crore.
Ahead of the IPO opening, Effwa Infra & Research Ltd raised ₹14.34 crore from anchor investors, indicating strong institutional interest and laying a solid foundation for the public offering. The minimum investment require by retail investors was set at ₹131,200, with an IPO lot size of 1,600 shares. Shreni Shares Limited acted as the book-running lead manager for the IPO, while Bigshare Services Pvt Ltd served as the IPO registrar.
Investor Response and Subscription Status
The response to Effwa Infra & Research Ltd’s IPO was nothing short of spectacular. By the second day of bidding, the IPO had been subscribed 37.55 times. With bids for 15.69 crore shares against an offer of 41.79 lakh shares. This enthusiastic participation highlighted the market’s confidence in the company’s growth prospects and the robustness of its business model.
The retail category saw particularly strong interest, with the IPO being subscribe 62.52 times in this segment. Non-Institutional Investors (NII) also showed substantial interest, subscribing 28.44 times. By the end of the bidding period, the IPO had been subscribed 54.72 times overall, with bids for 22.86 crore shares against the 41.79 lakh shares on offer. The quota for non-institutional investors received 42.27 times subscription, while retail individual investors (RIIs) portion was subscribed 90.55 times. The qualified institutional buyer (QIB) category also showed significant interest, with a 36 per cent subscription rate.
Grey Market Premium (GMP) and Market Sentiments
The Grey Market Premium (GMP) for Effwa Infra & Research Ltd’s shares has been a topic of keen interest among investors. The GMP, which reflects the premium at which shares are trading in the grey market. Indicates the market’s expectations for the stock’s performance post-listing. On July 8, 2024, the GMP for Effwa Infra & Research Ltd’s shares rose to ₹95 per share, suggesting a trading price of ₹177 per share in the grey market. This represented a premium of nearly 116% to the issue price of ₹82 per share.
The GMP further increased to ₹111 per share, indicating a 135.37% listing gain expected by the market. This surge in GMP underscores the strong investor sentiment and the high expectations for Effwa Infra & Research Ltd’s stock performance once listed on the NSE SME exchange.
Company Overview and Financial Performance
Effwa Infra & Research Ltd has established itself as a leader in the engineering and construction sector, particularly in the area of water pollution control. Moreover, The company’s comprehensive services span wastewater and industrial effluent treatment, solid waste treatment and disposal, aeration systems, hazardous waste management, and water treatment plants. Eventually, This diverse portfolio positions the company well to address the growing environmental and regulatory challenges faced by industries and municipalities.
In terms of financial performance, Effwa Infra & Research Ltd has demonstrated impressive growth. During the financial year 2023-24, the company’s revenue increased by 26.08%, reflecting its expanding market presence and successful project execution. Moreover, the profit after tax (PAT) surged by 169%, underscoring the company’s operational efficiency and effective cost management strategies.
Future Prospects and Strategic Vision
The successful IPO and the robust financial performance of Effwa Infra & Research Ltd highlight its potential for future growth. The funds raised through the IPO will be instrumental in supporting the company’s expansion plans. Enabling it to undertake larger and more complex projects, invest in advanced technologies, and strengthen its market position.
Effwa Infra & Research Ltd is well-position to capitalize on the increasing demand for sustainable and efficient water treatment solutions. As environmental regulations become more stringent and industries seek to adopt eco-friendly practices. The company’s expertise in water pollution control and waste management will be in high demand. Additionally, the growing focus on smart cities and infrastructure development presents significant opportunities for the company to expand its footprint and contribute to sustainable urbanization.
Conclusion
In conclusion, Effwa Infra & Research Ltd’s journey from its inception in 2014 to its successful IPO in 2024 is a testament to its resilience, strategic vision, and commitment to excellence. Moreover, The overwhelming response to its IPO, strong financial performance, and promising growth prospects make it a standout player in the engineering and construction sector. As Effwa Infra & Research Ltd continues to innovate and expand its services. It is poise to play a crucial role in addressing some of the most pressing environmental challenges of our time and contributing to a sustainable future.
