The Rs 300-crore Antony Waste Handling Cell initial public offer (IPO), which opened for subscription from today, has been subscribed 58 per cent in less than two hours.
The Rs 300-crore Antony Waste Handling Cell initial public offer (IPO), which opened for subscription from today, has been subscribed 58 per cent in less than two hours. Antony Waste Handling Cell’s IPO will comprise fresh issue of shares aggregating to Rs 85 crore and an offer-for-sale (OFS) of up to 68.24 lakh equity shares worth Rs 215 crore. From the day of the price band announcement, Antony Waste Handling Cell Ltd share price has surged in the grey market. Today, the shares were seen trading with 54 per cent premium or Rs 170 premium over the IPO price of Rs 315 apiece, at Rs 485 per share.
Manan Doshi, Co-Founder- UnlistedArena.com dealing in Pre-IPO & Unlisted Shares, told Financial Express Online that owing to the current frenzy in the IPO market, Antony Waste Handling Cell Limited is gaining traction in the primary market. The valuations at the offer price look reasonable, and small issue size adds to the frenzy. Company’s operations in niche sectors are getting superior valuations now.
In the grey market, Antony Waste Handling Cell shares premium has risen to 54 per cent from 12 per cent last week. Abhijeet Ramachandran, Independent Analyst/ Co-Founder and Trainer, Tips2Trade, told Financial Express Online that due to tremendous buzz in the IPO market primarily because of an excellent uptrend in major indices along with strong QIB and retail participation, grey market premiums seem to be in the higher side. Ramachandran advised investors to invest cautiously and keep booking profits on listing gains.
Antony Waste among India’s top 5 MSW players
Antony Waste Handling Cell is among India’s top five municipal solid waste management (MSW) players, providing full spectrum of MSW services which includes solid waste collection, transportation, processing and disposal services across the country, primarily catering to Indian municipalities. The firm has in-house expertise in the landfill construction and management sector.
Should you expect listing gains from Antony Waste Handling Cell IPO?
Government initiatives such as ‘Swachh Bharat Abhiyan’ will be a good opportunity for such companies, says Manan Doshi. He also added that major dependence on Municipal Corporations and failure in retention/extension of such projects may severely affect the revenues of the company in the longer run. “However, with the short-term factors being positive, the IPO is expected to get a very good response from the investors,” Doshi added.
Gaurav Garg Head of Research at CapitalVia Global Research Limited-Investment Advisor, told Financial Express Online, that in solid waste management space, there is no listed peer company in India. However, as compared to global peers, its valuations are attractive. However, the company’s business model is highly dependent on the continuation of its contracts with various municipal corporations. Limited revenue sources and a high degree of dependency (80%+ revenue from 5 contracts) on municipal authorities make the business model prone to high degree of risk. Given, the current euphoria in primary markets, the issue might see oversubscription. “However, given the over-dependency on a limited number of clients, we recommend investors (who want to invest for long term) to avoid this,” Gaurav Garg said.
Ramachandran sees that Antony Waste Handling IPO has been priced quite attractively with a PE of barely 10. “With consistent growth in revenue and profits coupled with strong entry barriers in the sector, renewed focus on cleanliness and waste management, investors are advised to subscribe for the IPO and hold from a long term perspective,” he added.