EMS IPO: All You Need To Know
The IPO comprises a fresh issue of Rs 146.24 crore, along with an offer for sale of up to 82.94 lakh shares.
EMS Ltd. launched its initial public offering on Friday, and the offer will be open till Sept. 12.
The IPO comprises a fresh issue of Rs 146.24 crore, along with an offer for sale of up to 82.94 lakh shares by promoter Ramveer Singh. The price band is set between Rs 200 and Rs 211 apiece. This sets the offer for sale size at Rs 175 crore at the upper price band.
The company provides sewerage and water supply infrastructure solutions for government authorities.
Issue Details
Issue opens: Sept. 8.
Issue closes: Sept. 12.
Fresh issue size: Rs 146.24 crore.
OFS size: Rs 175 crore.
Face value: Rs 10 apiece.
Fixed price band: Rs 200-211 per share.
Minimum lot size: 70 shares.
Listing: NSE, BSE.
Use Of Funds
The company plans to set aside Rs 101.2 crore from the fresh issue to fund it’s working capital requirements, according to the red herring prospectus it filed with the Securities and Exchange Board of India on Sept. 1. The remaining funds will be used for general corporate purposes, but not in excess of 25% of the net proceeds.
The Business
EMS specialises in providing comprehensive infrastructure solutions, including sewerage, water supply, waste treatment, electrical transmission, and roadworks for government bodies. They handle wastewater scheme projects and water supply scheme projects, including sewage and water treatment plants.
They also compete for tenders and have in-house design, engineering, and construction teams. They form joint ventures for project execution, holding a successful track record since 2010 with 50 independent projects and 17 projects acquired from a proprietorship in 2012.
FY23 Earnings
Revenue at Rs 538.2 crore.
Ebitda at Rs 149 crore.
Margin at 27.69%.
Net income at Rs 108.7 crore.
Key Risks
The company relies solely on government contracts for sewerage solutions, water supply systems, and waste treatment plants.
Its operations require substantial working capital, emphasising the need for strong liquidity.
Project timelines may extend due to factors like political risks, liquidity issues, and delays in obtaining clearances, often resulting in cost overruns in government projects.
