Municipal solid waste management company Antony Waste Handling Cell's public offer has received good response as it was oversubscribed by 15.04 times on December 23, the final day of bidding.
Investors put in bids for 10.02 crore equity shares against offer size of 66.66 lakh equity shares (excluding anchor book), the subscription data available on the exchanges showed.
Retail investors continued to support the issue from the day one of bidding as their reserved portion was subscribed 16.54 times and that of non-institutional investors 18.68 times.
The portion set aside for qualified institutional buyers was subscribed 9.67 times.
The public issue comprises a fresh issue of Rs 85 crore and an offer for sale of Rs 215 crore shares by existing shareholders. The price band for the issue has been fixed at Rs 313-315 per share.
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"Company is bringing the issue at P/E multiple of approximately 13 at higher price band of Rs 315 per share on FY20 EPS basis," Hem Securities said.
"Company being leading service provider in municipal solid waste (MSW) management sector with end-to-end capabilities has strong track record of project execution with diversified business model & access to technology backed vehicles and equipment enables company to manage its operations efficiently. Therefore, looking after all, we recommend subscribe the issue," the brokerage added.
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Antony Waste Handling Cell, one of the top five players in the Indian MSW management industry with an established track record of over 19 years, is going to utilise fresh issue proceeds for part-financing for PCMC WTE project through investment in subsidiaries (Rs 40 crore), reduction of consolidated borrowings (Rs 38.5 crore) and general corporate purposes.
Company provided full spectrum of MSW services which includes solid waste collection, transportation, processing and disposal services across the country, primarily catering to Indian municipalities.
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Prabhudas Lilladher also recommended subscribe rating on Antony Waste Handling Cell IPO on a near term basis as it sees reasonable listing gains given strong market sentiment and enormous outperformance of the recent public issues.
However, the brokerage remained cautious on company's long term growth based on factors like large dependency on projects from State government authorities primarily Municipal Corporations (unstable budget allocation for MSW management), highly competitive market (with presence of local, national and global players), untested and still emerging business model, huge capex required for growth and rich valuation (19.6x FY20 EPS versus Prabhudas Lilladher Infra coverage universe at an average of around 12x.
Antony Waste has a portfolio of 18 ongoing projects which include 12 MSW collection & transportation (C&T) projects, 4 mechanized sweeping projects and 2 MSW processing projects.
The company is also operating a 0.97MW WTE plant at Kanjurmarg, Mumbai and is developing a 14MW WTE plant at Pimpri-Chinchwad. With huge potential in the long run, AWHCL intends to continue bidding for commercially viable WTE projects from financially strong municipalities and private players.