Concord Enviro Systems Ltd, a leading player in the water and wastewater treatment industry, is set to launch its much-anticipated Initial Public Offering (IPO) on December 19, 2024. The company aims to raise ₹500.33 crore through a mix of fresh equity shares and an Offer for Sale (OFS) by existing shareholders. Let’s take a closer look at the IPO details, the company’s business model, strengths, weaknesses, and key financials.
Concord Enviro Systems IPO Key Highlights
- IPO Open Date: December 19, 2024
- IPO Close Date: December 23, 2024
- Offer Size: ₹500.33 crore
- Price Band: ₹665 to ₹701 per share
- Minimum Investment (Retail): 21 shares per lot, amounting to ₹14,721
- Share Listing: Proposed listing on BSE and NSE on December 27, 2024
The IPO consists of two components:
- Fresh Issue of shares worth ₹175 crore
- Offer for Sale (OFS) of 46 lakh shares from existing stakeholders
Business Model of Concord Enviro Systems
Concord Enviro Systems specializes in offering comprehensive water and wastewater treatment solutions globally, with a particular focus on Zero Liquid Discharge (ZLD) technology. Their integrated service portfolio includes:
- Design, Manufacturing, and Installation of water treatment plants
- Operation and Maintenance (O&M) services
- Digitalization Solutions using the Internet of Things (IoT)
- Turnkey Solutions, including effluent treatment plants, sewage treatment plants, and membrane bioreactors
Revenue Streams
The company generates revenue through:
- System Sales: Plants for water and wastewater treatment and reuse
- Operation and Maintenance Services
- Export Services: Concord Enviro Systems exports its solutions to markets in North America, Latin America, Africa, the Middle East, and Southeast Asia.
As of August 31, 2024, Concord Enviro Systems boasts a global client base of over 310 customers, including reputed names like Diageo Mexico Operaciones and AB Mauri.
Key Financial Performance
The company has demonstrated robust financial growth, with revenue and profits witnessing a substantial jump in recent years.
| Metrics | FY23-24 | FY22-23 | April-Aug FY25 |
|---|---|---|---|
| Revenue | ₹496.85 crore | ₹343.21 crore | ₹206.17 crore |
| Profit Before Tax | ₹43.99 crore | ₹7.55 crore | ₹82.5 lakh |
| Profit After Tax | ₹41.43 crore | ₹5.48 crore | ₹51.6 lakh |
Key Financial Ratios
- Return on Equity (RoE): 13.73%
- Return on Capital Employed (ROCE): 14.07%
- Debt-to-Equity Ratio: 0.47
- PAT Margin: 8.34%
These numbers reflect the company’s steady revenue growth and improving profitability, making it an attractive proposition for investors.
Strengths of Concord Enviro Systems
- Leader in Zero Liquid Discharge (ZLD) Technology
Concord Enviro Systems is one of the top two ZLD solutions providers in India, which positions it well to capitalize on the growing demand for wastewater treatment and reuse. - Integrated Manufacturing Capabilities
The company’s backward-integrated facilities allow it to control costs and deliver high-quality solutions throughout the value chain. - Global Presence
With exports spanning 14 countries across Asia, North Africa, Latin America, and Europe, the company has an established footprint in international markets. - Diversified Client Base
Concord Enviro Systems serves clients across industries and geographies, reducing its dependence on any single market or sector.
Challenges and Weaknesses
- Revenue Concentration Risk
The company relies heavily on its top 10 customers, who contribute more than 50% of its total revenue. For FY24, this accounted for ₹277.99 crore, or 55.95% of revenue. Any cancellation or reduction of orders from these customers could impact growth. - Order Book Uncertainty
While the company has a robust order book worth ₹501.74 crore as of August 31, 2024, there is always a risk of delays, cancellations, or adjustments to existing contracts. - Limited Ownership of Facilities
Concord Enviro Systems does not own certain manufacturing premises and office spaces, including a proposed assembly unit, which could pose operational risks. - Dependence on Key Facilities
The company’s manufacturing operations rely heavily on facilities in Vasai (India) and Sharjah (UAE). Disruptions at these locations could impact production and delivery timelines.
Conclusion: Should You Subscribe to Concord Enviro Systems IPO?
Concord Enviro Systems presents a strong investment opportunity for those looking to gain exposure to the growing global demand for water and wastewater treatment solutions. The company’s leadership in Zero Liquid Discharge (ZLD) technology, diversified revenue streams, and international client base add to its credibility.
However, investors should consider the risks associated with revenue concentration and order book uncertainties. With improving financial performance, strong margins, and steady growth, the IPO appears promising for medium to long-term investors.
Important Dates to Remember
- IPO Opens: December 19, 2024
- IPO Closes: December 23, 2024
- Allotment Date: December 24, 2024
- Refunds Initiation: December 26, 2024
- Listing Date: December 27, 2024
Investors are advised to evaluate the company’s fundamentals, risks, and growth potential before subscribing to the IPO.
By maintaining transparency and delivering reliable solutions worldwide, Concord Enviro Systems continues to solidify its position as a global leader in wastewater management.
Tags: Concord Enviro Systems IPO, ZLD Technology, Wastewater Treatment IPO, BSE IPO, NSE IPO, December 2024 IPO