Concord Enviro Systems IPO opens on December 19; check offer size, price band, business model & more

Concord Enviro Systems Ltd, which is a global water and wastewater treatment solutions provider, will launch its initial public offering (IPO) on December 19 to raise funds from the primary market.

The mainboard IPO is a mix of fresh issue of shares worth ₹175 crore and an offer-for-sale (OFS) of 46 lakh shares by existing shareholders.

Concord Enviro Systems aims to raise ₹500.33 crore via the IPO. The company has set the price band at ₹665 to ₹701 per share. The minimum lot size for the retail investors is 21 shares, aggregating to an investment of ₹14,721.

Here are the key details about the mainboard issue ahead of subscription.

Business model

Concord Enviro Systems is a global player offering water and wastewater treatment and reuse solutions. Its solutions also include zero liquid discharge (ZLD) technology.

The company has in-house capabilities to develop solutions across the value chain – designing, manufacturing, installation and commissioning, operation and maintenance as well as digitalisation solutions such as Internet of Things.

The company generates revenue through sale of systems and plants such as water and wastewater treatment, reuse of systems and plants, and turnkey solutions, effluent treatment plants, anaerobic digesters, membrane bioreactors and sewage treatment plants, among others. The company also offers operation and maintenance (O&M) services for installed plants and supplies consumables and spares for installed plants.

The company also exports water solutions and services to North America, Latin America, Africa, the Middle East, and Southeast Asia regions. It has a client base of 310 across the world. The company names Diageo Mexico Operaciones, AB Mauri and SA De CV, among its customers.

Concord Enviro Systems IPO dates

Concord Enviro Systems IPO will remain open for subscription from December 19 to December 23.

After the subscription, Concord Enviro Systems IPO share allotment status is expected to be finalised on December 24. The company will initiate refunds and transfer of shares to the Demat accounts on December 26.

Concord Enviro Systems has proposed to list its shares on the BSE and NSE on December 27.

Key financials

The company reported revenue from operations of ₹496.85 crore for the financial year ended March 2024 compared to ₹343.21 crore in the preceding financial year.

Its profit after tax (PAT) in FY 2023-24 stood at ₹41.43 crore, marking a multifold jump compared to ₹5.48 crore in FY 2022-23.

Key performance indicators

Concord Enviro Systems: Strengths and weaknesses

Strengths

• The company has expertise in zero liquid discharge (ZLD) technology in India and is well-placed to harness global industry opportunities in industrial wastewater reuse. The company was among the top two largest ZLD solutions providers in India in terms of revenue.
• The company is an integrated solutions provider supported by backward integrated manufacturing facilities. Its product and technology portfolio across the entire value chain of wastewater reuse solutions provides customers with lower costs of ownership during the product life cycle.
• It has an established presence in international markets spanning countries in North America, Latin America, Africa, and Southeast Asia. As of August 31, 2024, the company exported products and delivered services to over 14 countries in Asia, North Africa, Latin America and Europe.
• The company has a diversified customer base across multiple industries and geographies.

Weaknesses

• The company is dependent on and derives a substantial portion of its revenue (more than 50%) from its top 10 customers.
• During the April-August 2024 period, and the Fiscal 2024, its revenue from top 10 customers stood ₹112.74 crore and ₹ 277.99 crore, which is 54.69% and 55.95% of its revenue from operations respectively. Cancellation by customers or delay or reduction in their orders could have a material adverse effect on its business.
• The company faces the risk of the contracts in its Order Book being adjusted, cancelled or suspended by customers. Therefore, the Order Book is not necessarily indicative of its future revenue or profit. Its total Order Book for August 31, 2024 was ₹501.74 crore and Fiscal 2024, was ₹463.19 crore.
• The company does not own certain of the premises of manufacturing facilities and Registered and Corporate Office, including a proposed Assembly Unit.
• Its business is dependent and will continue to depend on manufacturing facilities at Vasai and Sharjah.

Key competitors

The company competes with players like Praj Industries, Triveni Engineering, Ion Exchange, VA Tech Wabag and Thermax.