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IPO bound EMS Ltd. to ride on govt's rising water infra investments

Posted On : 2023-08-22 17:36:32( TIMEZONE : IST )

IPO bound EMS Ltd. to ride on govt's rising water infra investments

With Central Government aggressively pushing Prime Minister's Water Vision@2047, IPO-bound sewerage solution provider EMS Ltd is eyeing a larger market share in government-funded water and waste-water treatment turnkey projects in tier II and tier III cities regions in the country.

Ghaziabad-headquartered company has completed over 67 projects in the last 12 years. It has executed various government projects supported by international funding agencies, such as World Bank. Most of its projects have been executed across states of Bihar, Uttarakhand, Madhya Pradesh, Rajasthan and Haryana.

"In the past seven years, both the Central and UP Governments have intensified focus on water conservation, treatment and supply - leading to a flurry of projects announced", said Ashish Tomar, Managing Director of EMS Ltd. Being a homegrown player with valuable experience in the sector, we at EMS Ltd have capitalised upon the opportunities - emerging as a growth ready player in an otherwise cluttered segment.

"India has only 4% of the world's water resources and 16% of the global population. Its per capita availability of usable freshwater accounts for ~1,123 cubic metres, as against the current global average of 3,000 cubic metres. PM's Water Vision @ 2047 is a step towards the right direction, translating into a host of business opportunities for companies such as us", added Ashish.

Incorporated in December 21, 2010, EMS provides various services, ranging from EPC and O&M in sewerage solutions, water supply systems, and wastewater schemes for government authorities and local bodies. The company executes all World Bank-funded projects through governments and regional bodies where the funds are already allocated, thereby keeping its balance sheet healthy.

The Jal Shakti Ministry, with a $51 billion budget, aims to increase household water connection coverage from 18.33% to 100% by 2024, attracting water-related suppliers. This ambitious project is creating opportunities for suppliers of water meters, water quality monitoring systems, water management-related IT systems, tertiary treatment technology, and water-related Engineering, Procurement, and construction companies.

The National Mission for Clean Ganga, the Jal Jeevan Mission, and Community Drinking Water Schemes are just a few of the initiatives that the government is expected to support further. This will result in a larger order pipeline for local and national businesses operating in these specialised sectors."

Vineet Arora, MD of NAV Capital, a Singapore-based fund, agreed with Tomar's assertions, saying that the Indian government at the Centre has led the water conservation and cleanliness narratives, drawn higher participation, and spent from the private and public sectors. Given the complexities involved with such projects, the once-regional players are capitalising on the opportunity to expand their national growth ambitions. Many such companies will be looking at an orbital shift in value creation.

In March 2023 EMS Ltd. filed draft papers with SEBI to raise funds through an initial public offering. The IPO includes a fresh issue of equity shares worth Rs 180 crore and an offer for the sale of 82.94 lakh shares by promoter Ramveer Singh. At present, Singh holds a 97.81 per cent stake in the company. As per DRHP, the company may consider a pre-IPO placement of up to Rs 60 crore; if such a placement takes place, the number of equity shares will be reduced from the issue. Proceeds from the fresh issue will fund working capital requirements and other general corporate purposes. The company has already received SEBI's approval to proceed with this initial public offering.

Source : Equity Bulls


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