Concord Enviro Systems IPO: Fresh Shares Worth Rs 175 Crore to Open on December 19

Concord Enviro Systems IPO

Concord Enviro Systems IPO: Fresh Shares Worth Rs 175 Crore to Open for Subscription on December 19

The Concord Enviro Systems IPO is set to open for subscription on December 19, offering a fresh opportunity for investors to participate in the company’s expansion journey.

Concord Enviro, a prominent player in the water and wastewater treatment solutions industry, is issuing fresh equity shares worth Rs 175 crore as part of this public offering.

Additionally, 46.40 lakh shares will be sold through an Offer for Sale (OFS) by existing shareholders.

This IPO is one of the six public offerings launching in the week starting December 19, joining other companies such as DAM Capital Advisors, Ventive Hospitality, Sanathan Textiles, Mamta Machinery, and Transrail Lighting.

The price band for the Concord Enviro Systems IPO will be announced on December 16, just a few days before the issue opens for subscription.

The IPO will remain open for retail investors until December 23, while anchor investors will be able to subscribe to the issue on December 18, a day before the general subscription window opens.

The company’s shares will begin trading on the BSE and NSE from December 27, and Motilal Oswal Investment Advisors and Equirus Capital are the book-running lead managers to the issue.

About Concord Enviro Systems IPO

The Concord Enviro Systems IPO will not only raise funds to fuel the company’s expansion plans but also give the company a chance to reduce debt and improve its financial health. The proceeds from the fresh issue of shares will be directed towards several key areas:

1. Greenfield Project in the UAE: Concord Enviro aims to establish a new water and wastewater treatment facility in the UAE, which will help the company tap into the growing demand for water treatment solutions in the Middle East. This will further enhance its international footprint.
2. Brownfield Project in Vasai, India: The company will also expand its existing facility in Vasai, a town near Mumbai, through the investment in a brownfield project. This expansion will help increase production capacity, enhance operational efficiency, and support its growing business operations.
3. Repayment of Debt: A significant portion of the funds will go towards reducing the company’s debt burden, helping improve its financial leverage and reduce interest costs, making the company more financially stable moving forward.
4. Plant and Machinery: The company intends to invest in purchasing new plant and machinery, which will improve its operational capabilities, allowing it to meet the increasing demand for water and wastewater treatment solutions.
5. Working Capital Requirements & General Corporate Purposes: A part of the funds will be used to support working capital requirements and other corporate expenses to fuel its long-term growth.

By addressing these strategic areas, the company aims to boost its operational capabilities, improve its financial position, and expand its market presence in both domestic and international markets.

Concord Enviro Systems Business Model and Operations

Concord Enviro Systems operates in a highly critical sector that focuses on providing water and wastewater treatment solutions.

Water is one of the world’s most valuable resources, and as global population and industrial growth continue, demand for clean water and wastewater treatment has risen sharply. Concord Enviro caters to this demand by offering a range of services and products, including:

• Turnkey Water Treatment Systems and Plants: The company designs, manufactures, and installs water treatment systems and plants for various industries, including industrial, municipal, and commercial sectors.
• Operation and Maintenance Services: Concord Enviro offers long-term operation and maintenance (O&M) services for water treatment plants, ensuring continuous and effective management of water resources for its clients.
• Consumables and Spare Parts Manufacturing: In addition to providing treatment systems and services, Concord Enviro also manufactures consumables and spare parts for the maintenance of water treatment plants, providing a comprehensive solution to its customers.

Competitive Landscape

Concord Enviro competes in a market populated with both large multinational companies and regional players. Some of its key competitors include well-established names such as:

• Praj Industries
• Ion Exchange (India) Ltd
• Triveni Engineering
• VA Tech Wabag
• Thermax Ltd

Despite this competition, Concord Enviro has managed to carve out a niche for itself, primarily by focusing on turnkey projects, providing comprehensive water treatment solutions that encompass design, installation, and operation.

The company’s strong emphasis on quality, customer satisfaction, and innovative solutions has helped it win contracts both in India and abroad, expanding its reach in international markets.

Financial Performance and Growth Trajectory

Concord Enviro Systems has demonstrated significant financial growth in recent years, with key figures showing robust performance:

• Profit Growth: The company’s profit after tax (PAT) has surged by an impressive sevenfold to Rs 41.4 crore in the financial year ending March 2024, up from Rs 5.5 crore in FY 2023. This growth reflects the company’s improving operational efficiency, higher revenue generation, and reduced debt burden.
• Revenue Growth: For FY 2024, Concord Enviro’s revenue grew by 44.8%, reaching Rs 496.8 crore, up from Rs 343.2 crore in the previous fiscal year. This uptick in revenue is attributed to a growing order book, increased project execution, and expansion into new geographical markets.
• Order Book: As of August 2024, the company’s order book stood at Rs 501.75 crore, with a significant portion (74.5%) coming from system and plant orders. This reflects the company’s ability to secure large projects and grow its pipeline of future business.
• Profitability in the First Half of FY 2025: In the five months ending August 2024, Concord Enviro reported a net profit of Rs 0.5 crore on revenues of Rs 206.2 crore, demonstrating its steady progress towards sustaining profitability while scaling operations.

Global Presence and International Expansion

Concord Enviro has a strong presence in both domestic and international markets. The company exports its water treatment solutions to countries across North America, Latin America, Africa, the Middle East, and Southeast Asia.

Its international clients include prominent companies such as Diageo Mexico Operaciones and AB Mauri, which are testament to the company’s growing global footprint.

By focusing on both greenfield and brownfield projects, Concord Enviro aims to strengthen its position in the Middle Eastern and Indian markets.

The ongoing investment in technology, capacity expansion, and international partnerships will further solidify its global presence in the coming years.

Investment Outlook

The Concord Enviro Systems IPO presents a promising investment opportunity in the growing water treatment sector.

With a strong financial track record, an expanding order book, and significant plans for expansion, the company is poised for continued growth.

Its focus on both domestic and international markets, combined with strategic investments in technology and operational capacity, positions it well to capitalize on the increasing demand for water treatment solutions globally.

Investors interested in the infrastructure and environmental sectors may find Concord Enviro Systems to be a worthwhile addition to their portfolios, especially as the company continues to evolve and expand its offerings in both established and emerging markets.

In conclusion, the Concord Enviro Systems IPO offers not only a chance to invest in a company with strong fundamentals but also an opportunity to be part of a business contributing to sustainable and much-needed water treatment solutions across the globe.