EMS Limited IPO

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i. EMS Limited is in the business of 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.

ii. WWSPs include Sewage Treatment Plants (STPs) along with Sewage Network Schemes and Common Effluent Treatment Plants (CETPs) and WSSPs include Water Treatment Plants (WTPs) along with pumping stations and laying of pipelines for supply of water (collectively, “Projects”). The treatment process installed at STPs and CETPs is compliant with Ministry of Environment, Forest and Climate Change of India norms and the treated water can be used for horticulture, washing, refrigeration and other process industries.

iii. The Company bids for tenders issued by CPWD, State Governments and Urban Local Bodies (“ULBs”) for developing WWSPs and WSSPs on EPC or HAM basis.

iv. They have an in-house team for designing, engineering and construction which makes us self-reliant on all aspects of the business. They have a team of 61 engineers who are supported by third-party consultants and industry experts to ensure compliance and quality standards laid down by the industry and government agencies & departments.

v. They also have their own team for civil construction works thereby reducing dependence on third parties. The scope of their services typically includes design and engineering of the projects, procurement of raw materials, execution at site with overall project management up to the commissioning of projects.

Services Offered

➢ Sewerage and their allied works including design, procurement, laying, jointing, testing, commissioning, operation and maintenance of new sewerage network as well as refurbishment of old/existing sewerage network.
➢ Design, construction, operation and maintenance of Sewage Treatment Plants.
➢ Design, construction, operation and maintenance of Sewage Pumping Stations.
➢ Water supply works including design, procurement, laying, jointing, testing, commissioning, operation and maintenance of new water supply and distribution networks as well as construction of reservoir and refurbishment of old/existing water supply infrastructures.
➢ Road & Allied works including construction of new road networks as well as repair/renovation of existing road networks.

Competitive Strengths

i. In house designing, engineering and execution team
ii. Strong execution capabilities with industry experience
iii. Use of traditional technologies in the construction and installation of WWSP or WSSP

Objects of the EMS Limited IPO:

The company intends to utilize the net proceeds from the issue towards the funding of the following objects: i. Funding of working capital requirements of the company; and ii. General corporate purposes.
DRHP of EMS Limited IPO
RHP of EMS Limited IPO

EMS Limited IPO Details:

Open Date: Sep 08 2023
Close Date: Sep 12 2023
Total Shares: 15,224,924
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 321.24 Cr Cr.
Lot Size: 70 Shares
Issue Price: ₹ 200 - 211 Per Equity Share
Listing At: NSE,BSE
Listing Date: Sep 21 2023

Promoters And Management:

Mr. Ramveer Singh, aged 60 years is the founding Promoter and is currently designated as Chairman and Director of the Company. He was appointed as the First Director on the Board of the Company at the time of incorporation of the Company on December 21, 2010. Mr. Ashish Tomar, aged 34 years is the also founding Promoter and is currently designated as Managing Director of the Company. He was appointed as the First Director on the Board of the Company at the time of incorporation of the Company on December 21, 2010. He is a Civil Engineer. He is also having vast knowledge and experience in the field of projects like Sewerage work, Electricity Transmission & Distribution work. He is currently looking after Projects execution areas of the Company. Ms. Kritika Tomar, aged 29 years and is currently designated as Whole Time Director of the Company. She is a postgraduate in MSc. Biotech from Mody University, Rajasthan. She is associated with the company from October 17, 2022 & looks after the administrative work of the company

Financials of EMS Limited IPO:

A. Balance Sheet
Particular (In Lakhs) Mar-21 Mar-22 Mar-23
Equity Share Capital 1,175 1,175 4,700
Reserves 29,016 36,843 44,083
Borrowings 316 371 4,540
Trade Payables 4,030 4,301 1,540
Other Liabilities 3,293 7,565 9,008
Total Liabilities 7,640 12,237 15,088
Net Block 930 1,817 1,794
Capital Work in Progress 275 30 403
Investments 729 819 1,080
Other Assets 5,917 6,113 11,712
Total NC Assets 7,852 8,779 14,989
Receivables 9,329 15,782 12,354
Inventory 3,543 5,413 10,476
Cash & Bank 6,752 8,992 12,122
Other Assets 10,356 11,288 13,930
Face value 10 10 10
B. Profit & Loss Statement
Particular (In Lakhs) Mar-21 Mar-22 Mar-23
Sales 33,070 35,985 53,816
Raw Material Cost 20,822 24,447 40,942
Change in Inventory 748 -1,867 -5,062
Employee Cost 785 1,065 1,402
Other Expenses 826 1,088 1,634
Other Income 548 325 512
EBITDA 10,438 11,576 15,411
EBITDA Margin 31.56% 32.17% 28.64%
Depreciation 174 252 340
Interest 445 575 384
Profit before tax 9,819 10,749 14,687
Tax 2,628 2,856 3,820
Net profit 7,191 7,893 10,867
NPM (%) 21.39% 21.74% 20.00%
C. Cash Flow Statement
Particular (In Lakhs) Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation 10,043 10,982 14,959
Receivable -5,393 -6,454 -1,192
Inventory 748 -1,870 -5,063
Payable 108 271 -2,761
Other WC Items -1,906 -648 -8,467
Working Capital Changes -6,443 -8,701 -17,483
Direct Taxes -23 -18 -16
Net Cash Inflow from Operating Activity 3577 2264 -2540
Cash from Investing Activity
Fixed assets purchased -829 -845 -879
Fixed assets sold 0 39 91
Investments purchased -11 -83 -190
Other investing items -8 -589 -58
Net cash inflow from investing activities -848 -1,478 -1,036
Cash from Financing Activity
Proceeds from borrowings 0 55 4,168
Repayment of borrowings -1,163 0 0
Intrest paid fin -44 -2 -0.07
Other financing items 118 224 1,470
Net Cash Flow 1,640 1,062 2,062

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
EMS Limited 538 109 19.57 10.8 211 1172
VA Tech Wabag Limited 2960 11 2.07 10.8 498 3099
* All the Data is as per FY23.

Recommendation on EMS Limited IPO:

Review and Recommendation of EWS Limited IPO by IZ team is 4/10 1..EMS Limited is a company that specializes in various utilities and infrastructure services, including sewerage solutions, water supply systems, water and waste treatment plants, electrical transmission and distribution, road and related works. They also manage operation and maintenance of Wastewater Scheme Projects (WWSPs) and Water Supply Scheme Projects (WSSPs) for government authorities. 2. There are some concerns when it comes to working with government companies, particularly around payment delays and corruption, which can be more prevalent when acquiring projects through tenders. 3. The company's peer, Va Tech Bagh, has shown almost no growth in revenue and has provided very low returns over the last 5 years. 4. EMS Limited itself has shown stagnant revenue growth, with revenue being INR 314 crore in 2019 and only slightly increasing to INR 322 crore in 2022. However, there has been a notable uptick in FY23 with revenues exceeding INR 500 crore. Despite this revenue growth in FY23, the company has not generated cash from its operations. 5. While the sector is not particularly appealing to us, the company's valuation seems relatively inexpensive, with a P/E ratio of 10.8 and a market capitalization of INR 1172 crore.

Lead Manager of EMS Limited IPO:

  1. Khambatta Securities Limited

Registrar of EMS Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

EMS Limited 701, DLF Tower A, Jasola New Delhi-110025 Phone: +91 8826696627 Email: cs@ems.co.in Website: https://ems.co.in/#

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