Antony Waste Handling Cell shares grey market premium surges 54%; should you expect listing gains?

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.

Also read: Antony Waste Handling Cell IPO opens today; should you subscribe or not?

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. According to Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd, the positives for the company include a presence in the fast-growing MSW management industry with end-to-end capabilities, a strong track record of project execution, long-term contracts with municipalities, and experienced promoters and management team with strong domain expertise.

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.

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.

At the upper price band of Rs 315, Antony Waste Handling Cell is available at P/E of 15x on FY21E EPS. “Valuation looks attractive, considering healthy margins, improving revenue generation and increasing relevance of waste management. Hence, we recommend ‘subscribe’ to the issue with a long-term perspective,” analysts at Geojit Financial Services said.