EMS LTD IPO: Review, Valuation, Date & Todays GMP

EMS Limited - Complete Overview

Founded in 2012, EMS Limited specializes in providing comprehensive solutions for sewerage, water supply systems, water and waste treatment plants, electrical transmission and distribution, road construction, and maintenance of wastewater scheme projects (WWSPs) and water supply scheme projects (WSSPs) for government authorities and bodies.

The WWSPs encompass sewage treatment plants (STPs), sewage network schemes, and common effluent treatment plants (CETPs), while WSSPs include water treatment plants (WTPs), pumping stations, and the installation of water supply pipelines. The treatment processes at STPs and CETPs adhere to the environmental norms set by the Ministry of Environment, Forest and Climate Change of India, ensuring that the treated water is suitable for various applications such as horticulture, washing, refrigeration, and industrial processes.

EMS Limited actively participates in competitive tenders issued by organizations like CPWD, State Governments, and Urban Local Bodies (ULBs) for the development of WWSPs and WSSPs on an Engineering, Procurement, and Construction (EPC) or Hybrid Annuity Model (HAM) basis.

The company has an in-house team for designing, engineering, and construction, which makes it self-reliant in all aspects of the business. EMS Limited has a team of 57 engineers who are supported by third-party consultants and industry experts.

As of March 24, 2023, the company is actively operating and maintaining 13 projects, including WWSPs, WSSPs, STPs, and HAM projects, with a combined value of Rs. 1,38,909.00 lakhs. Additionally, it manages 5 operation and maintenance (O&M) projects worth Rs. 9,928.00 lakhs, representing unbilled amounts as of February 28, 2023, spread across five states.

 

What does the company do? 

EMS Limited is engaged in the business of being a sewerage solution provider, water supply system, water and waste treatment plants, electrical transmission and distribution, road and allied works, operation, and maintenance of wastewater scheme projects (WWSPs), and water supply scheme projects (WSSPs) for government authorities/bodies.

 

 

IPO Overview 

The EMS Limited IPO date is scheduled from September 8th to September 12th, 2023, with an anticipated listing on both the BSE and NSE on September 21st, 2023. 

The EMS Limited IPO price is set at Rs. 200 to Rs. 211 per share, with a total issue size of Rs. 321.24 Crores. This IPO is categorized as a book-built issue IPO.

 

EMS Limited IPO timetable (Tentative)

EVENTS	DATE
IPO Opening Date	8 September 2023
IPO Closing Date	12 September 2023
IPO Allotment Date	15 September 2023
Refund initiation	18 September 2023
IPO Listing Date	21 September 2023

 

EMS Limited IPO Details

IPO Opening & Closing Date	8 September to 12 September 2023
Face Value	Rs.10 Per Share
Issue Price	Rs. 200 to Rs. 211 Per Share
Lot Size	70 Shares
Price of 1 Lot	Rs. 14,770
Issue Size	[.] Shares (aggregating up to Rs. 321.24 Cr)
Offer for Sale	[.] Shares of Rs. 10 (aggregating up to Rs. 175.00 Cr)
Fresh Issue	[.] Shares (aggregating up to Rs. 146.24 Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Kfin Technologies Ltd.

 

EMS Limited IPO Lot Details 

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	13 Lot
Minimum Lot Investment (HNI)	14 Lot
Maximum Lot Investment (HNI)	67 Lot

 

EMS Limited IPO Reservation

Institutional Share Portion	50%
Non-Institutional Share Portion	15%
Retail Share Portion	35%

 

Company Financial

Amount in Crores

Period	FY - 21	FY - 22	FY - 23
Total Assets	378.31	502.55	638.72
Total Revenue	336.18	363.10	543.28
PAT	71.91	78.93	108.67
Net Worth	301.91	380.18	487.83
Reserve & Surplus	290.16	368.43	443.45
Total Borrowings	3.16	3.71	45.40

 

State-wise Revenue of EMS Limited

Amount in Lakhs

Name of the State	FY 23	FY 22	FY 21
Uttar Pradesh	26,385.76	13,279.93	25,983.14
Rajasthan	12,436.98	13,068.73	408.46
Bihar	9,406.26	7,039.82	5,159.78
Uttarakhand	5,382.88	2,080.51	1,121.95
Madhya Pradesh	160.13	494.62	383.48
Others	44.16	21.48	13.58
Total	53,816.17	35,985.09	33,070.39

 

Objective of the Issue 

The company is intended to utilize the raised funds to fulfil the following objectives:

• Meeting working capital needs.
• Fulfilling general corporate purposes.

 

Promoters and Management of EMS Limited

Mr Ramveer Singh and Mr Ashish Tomar are the Promoters of the Company.

Pre-issue Promoter shareholding	96.71%
Post-issue Promoter shareholding

 

Peer Comparison

According to the EMS Limited DRHP, the following are the listed peers of the company: 

Company Name	Total income (Rs. in Lakhs)	EPS Diluted (Rs.)	P/E Ratio
EMS Limited	54,327. 71	23.15	-
VA Tech Wabag Limited	3,01,408	36.87	13.86

 

IPO's Valuations

EMS Limited's IPO price is set between Rs. 200 to Rs. 211, and the company's EPS stands at Rs 23.15 per share. When considering the upper band of the issue to evaluate IPO valuation, the P/E ratio is approximately 9.11.

 

Dividend Policy

The company has not distributed any dividends in the past, and any future dividend payments will depend on the company's financial health.

 

IPO's Strengths 

• A team specializing in in-house design, engineering, and execution.
• Demonstrated execution prowess coupled with industry expertise.
• Utilization of conventional technologies in WWSP or WSSP construction and installation.
• Participation in projects funded by the World Bank.
• A seasoned group of promoters and a highly experienced senior management team.
• A substantial and well-structured order book.
• An adaptable and low-asset business model bolstered by a solid financial foundation.

 

IPO Weaknesses

• The Company, along with its Promoters/Directors and Group Companies, is involved in ongoing legal proceedings.
• The company has faced blacklisting in the past.
• Most of the company's agreements related to its business incorporate penalty or liquidated damage clauses for project completion delays.
• The company primarily bids for WWTPs and WSSPs, which are often funded by the World Bank through Central and State Governments, constituting its main revenue source.
• The company utilizes conventional technologies in the design and installation of WWTPs and WSSPs.
• The industry in which the company operates is characterized by its capital-intensive nature and extended gestation periods.
• A significant portion of the company's revenue is derived from transactions with government entities or agencies.
• The company's business experiences seasonal fluctuations.
• To conduct its operations, the company requires specific approvals and licenses, along with compliance with applicable rules and regulations.
• The company's ongoing projects face various implementation risks and uncertainties and may encounter delays, modifications, or cancellations beyond its control, potentially impacting its business adversely.
• The company has reported negative cash flows in certain instances.

 

 

IPO GMP

Latest GMP of EMS Limited IPO is Rs. 115.

 

Conclusion

The EMS Limited IPO is exhibiting strong performance in the gray market, and the company boasts a robust order book. However, it's crucial for investors to be mindful of certain drawbacks associated with the company. Therefore, conducting a thorough analysis of the issue is advisable to achieve the most optimistic investment outcomes.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP

 

 

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