CONTENTS: Effwa Infra IPO rockets in grey market

Effwa Infra & Research Limited’s initial public offering (IPO), which began public subscription on Friday, saw significant bidding activity by the second day. By 5:30 PM on Monday, the Rs 51.27-crore IPO had achieved a robust 54.72 times subscription, receiving bids for 22,86,65,600 shares compared to the 41,79,200 shares available.

The non-institutional investors’ quota was subscribed 42.27 times, while retail individual investors (RIIs) subscribed 90.55 times. The qualified institutional buyer (QIB) category received a 36 per cent subscription.

The Effwa Infra & Research IPO will close on July 9, with a price band set at Rs 78-Rs 82 per share. The IPO allotment is scheduled for July 10, and the shares are expected to be listed on the NSE SME on July 12.

Market observers note that unlisted shares of Effwa Infra and Research Ltd are trading at Rs 111 above the issue price in the grey market. This Rs 111 grey market premium (GMP) suggests an anticipated 135.37% listing gain for the public issue. The GMP fluctuates based on market sentiments, having increased from Rs 95 on Monday morning to Rs 111.

The term ‘grey market premium’ reflects investors’ willingness to pay more than the issue price. The Effwa Infra and Research IPO includes a fresh issue of 53.17 lakh shares totaling Rs 43.60 crores and an offer for sale of 9.36 lakh shares totaling Rs 7.68 crores.

Investors must apply for a minimum of 1,600 equity shares, with the minimum investment for retail investors being Rs 1,31,200 [1,600 shares (lot size) x Rs 82 (upper price band)].

Shreni Shares Limited is serving as the book-running lead manager for the Effwa Infra and Research IPO, while Bigshare Services Pvt Ltd is the registrar. Rikhav Securities is the market maker for this IPO.

Founded in 2014, Effwa Infra & Research Limited specializes in engineering, consulting, procurement, construction, and integrated project management services focused on water pollution control. Their services encompass wastewater and industrial effluent treatment, solid waste treatment and disposal, aeration systems, hazardous waste management, and water treatment plants.

In the financial year 2023-24, Effwa Infra & Research Limited experienced a revenue increase of 26.08 percent and a 169 percent rise in profit after tax (PAT).