Antony Waste Handling Cell IPO opens today; should you subscribe or not?

By: |
December 21, 2020 8:48 AM

Investors can bid for the IPO of Antony Waste Handling Cell in a lot size of 47 shares, translating to an investment of Rs 14,805 per lot.

Mrs bectors food IPO, burger kingWith almost 2 decades of experience in the waste management industry, Antony Waste Handling has a strong execution track record.

Antony Waste Handling Cell will once again knock on the doors of Dalal Street investors for its initial public offering (IPO) from today. At a price band of Rs 313-315 per share, Antony Waste Handling is looking to raise Rs 300 crore. Antony Waste Handling’s IPO is a mix of a fresh issue worth Rs 85 crore and an Offer for Sale (OFS) by existing shareholders worth Rs 215 crore. Antony Waste Handling, earlier tried to make its debut on the bourses in March just as the investors across the globe were panicking and pulling money away from equities.

Anchor investors

Ahead of the IPO, Antony Waste Handling managed to raise Rs 90 crore from 10 anchor investors. Massachusetts Institute of Technology was the largest investor among the 10, picking up a 44.44% stake in the firm at the upper end of the price band. Other anchor investors include, Tata AIG General Insurance, SBI Mutual Fund, and 238 Plan Associates. 

Issue details

Investors can bid for the issue in a lot size of 47 shares, translating to an investment of Rs 14,805 per lot. Post issue, the promoter and promoter group will hold a 46.23% in the company, down from 51.10%. Public shareholding in the company will increase to 53.77% from 48.90% earlier. “At the higher price band of Rs. 315 per share, the company’s share is valued at a P/E multiple of 26.1x (to its restated TTM EPS of Rs. 12.1), which is at discount to the peer average of 32.7x,” said brokerage and research firm Choice Broking. Although the comparison has been made with global peers and not with listed peers with similar businesses in India as there were none.

To Subscribe or not?

Analysts at Choice Broking have a ‘Subscribe with caution’ rating on the stock, considering the macros of the sector, demanded valuations and concerns on the receivables. Valuing the business at a P/E of 11.5x on FY20 basis, Keshav Lahoti Associate Equity Analyst, Angel Broking has a ‘Neutral’ rating on the issue. “For Antony Waste Handling Cell to grow its business it needs to win new contracts from municipalities. The top 5 clients contributed 81.8% of the revenue of the fiscal year 2020. So in the future if a company is not able to win an existing major contract again, it will impact the financials adversely,” he said.

With almost 2 decades of experience in the waste management industry, Antony Waste Handling has a strong execution track record. The company plans to use the net proceeds from the fresh issue for the part-financing for PCMC WTE Project through investment in their subsidiaries, AG Enviro and/or ALESPL. The company is currently undertaking projects in Municipal Corporation of Greater Mumbai, Navi Mumbai, Thane, North Delhi, Noida, and Nagpur, among others.

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