EMS Ltd, a prominent provider of infrastructure services including sewerage solutions and water supply systems, saw its initial public offering (IPO) close on Tuesday with a strong subscription of 23.02 times. The retail investors' portion was subscribed 22.64 times, the Non-Institutional Investors (NII) portion was subscribed 50.04 times, and the Qualified Institutional Buyers (QIB) portion was subscribed 2.74 times.
The IPO opened for subscription on Friday, September 8, and witnessed a positive response from retail and non-institutional investors throughout its subscription period. On the first day, the offer was subscribed 3.77 times and by the second day, it was subscribed 15.05 times.
The EMS IPO comprises a fresh issue of shares worth ₹146.24 crore (approx. $17.6 million) and an offer for sale (OFS) of 82,94,118 shares of ₹10 each, aggregating to ₹175 crore sold by promoter selling shareholder Ramveer Singh. The total issue size is ₹321.24 crores. Prior to the public issue, EMS Ltd raised about ₹96.37 crore from anchor investors which include domestic and foreign entities like NAV Capital VCC-NAV Capital Emerging Star Fund, Abakkus Diversified Alpha Fund, Saint Capital Fund, Meru Investment Fund, Bofa Securities Europe, and Morgan Stanley (NYSE:MS) Asia (Singapore) PTE.
The net proceeds from the fresh issue will be used to fund the working capital requirements of the company and for general corporate purposes. Before filing the red-herring prospectus, EMS Ltd obtained ₹33.76 crore through a private placement of 16 lakh shares at the upper price band, reducing the fresh issue's size from ₹180 crore to ₹146.24 crore.
Brokerage firms have shown optimism towards the EMS IPO. Choice Equity Broking stated that the issue demands a P/E multiple of 10.9x to its FY23 earnings, which is less than the industry average, making the issue attractive. Hensex Securities also recommended subscribing to the issue for both listing gains and long-term investment.
The basis of allotment of shares will be finalized on Friday, September 15, and refunds will be initiated on Monday, September 18. The shares are expected to be credited to the demat account of allottees on Wednesday, September 20 and are likely to be listed on BSE and NSE on Thursday, September 21.
In the grey market, EMS shares were trading at a premium of ₹120. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of EMS share is ₹331 apiece, which is 56.87% higher than the IPO price of ₹211.
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