Concord Enviro Systems Limited, an integrated solutions provider of industrial wastewater reuse and zero liquid discharge ("ZLD") solutions, with an inhouse position across the value chain including design, component manufacturing, installation and commissioning and operation and maintenance ("O&M") including digitalization solutions including Internet of Things ("IoT") technology for analysis of customer data has filed its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), to rai??se funds through an initial public offering (IPO).
The issue with a face value of Rs 5 per equity share consists of a fresh issue of equity shares worth up to Rs 175 crore and an offer-for-sale (OFS) up to 3,569,180 equity shares by Promoter and selling shareholders, which comprises of up to 3,114,660 by AF Holdings, up to 150,600 by Prayas Goel, up to 150,500 equity shares by Prerak Goel, up to 29,500 equity shares Namrata Goel, up to 31,500 equity shares by Nidhi Goel and up to 92,420 equity shares Pushpa Goel ("Selling Shareholders").
The Offer is being made through the Book Building Process, wherein not less than 75% of the Offer shall be available for allocation to Qualified Institutional Buyers, not more than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidders.
Additionally, the company in consultation with merchant bankers to the issue may consider a right issue, private placement, preferential issue of equity shares or any other method aggregating up to Rs. 35 crore. If such placement is completed, the fresh issue size will be reduced.
The proceeds from its fresh issuance worth Rs. 18 crore will be utilised for investment in its material Subsidiary, Concord Enviro FZE ("CEF") in relation to financing the construction of an assembly unit ("Assembly Unit") in Sharjah International Airport Free Zone, Rs 30 crore in Rochem Separation Systems (India) Private Limited ("RSSPL") for funding its working capital requirements, Rs 30 crore in investment in our Material Subsidiary, CEF for funding its working capital requirements, Rs 66.50 crore for Prepayment or repayment of all or a portion of certain outstanding borrowings availed by its subsidiaries and general corporate purposes.
The Mumbai-based company is the second largest Indian solutions provider in Fiscal 2021 for industrial water recycle and reuse systems in terms of revenue, according to a company commissioned Frost & Sullivan report. In Fiscal 2021 the company was the largest Zero-liquid discharge (ZLD) solutions provider in India in revenue terms, and through their recycling solutions have been supporting its clients to achieve water conservation and achieve sustainability.
For the nine month ended December 31, 2021 and Fiscal 2021, the company serviced over 356 domestic customers and 27 international customers across a diverse set of industries such as pharmaceutical, chemicals, food and beverage, defence and offshore, automotive and auto ancillaries, steel and textiles.
The company provides solutions to their customers on a turnkey basis or on rental basis under its "pay per use/pay as you treat" model, that customers are able to avoid large capital expenditures. The company integrated solutions incorporate their own custom designs of systems and plants including effluent treatment plants, membrane-based systems including ultra-filtration, nano-filtration, reverse osmosis and waste heat evaporators ("WHE"). In addition, the company offers their customers a comprehensive suite of O&M services including spare parts.
The company has also implemented digitalization solutions (including IoT) to provide data capture and analysis platforms that enable real-time monitoring, troubleshooting and preventative maintenance of their installed systems and plants.
The company develops their solutions through their in-house R&D team, which designs industry-specific membranes for their systems and develops new technology and processes. As of March 31, 2022, the company had been awarded three patents in India and had filed three additional patent applications. The company has two manufacturing facilities, one located at Vasai in Maharashtra, India, and the other at Sharjah in the UAE.
The company has a diversified customer base across industry sectors and geographies. In the nine-month period ended December 31, 2021 and in Fiscal 2021, the company exported their products and delivered our services to over 18 countries in Asia, North Africa, Latin America and Europe, through its two major international customers are East Africa Breweries (a subsidiary of Diageo Great Britain Ltd) and AB Mauri.
As at April 30, 2022, it had an order book of Rs 172.35 crore (including advance purchase orders), of which 46.24% comprises system and plant orders and 53.76% comprises after-sales revenue (including consumables and spares orders and O&M services orders).
The companies' revenue from operations stood at Rs 347.60 crore for Fiscal 2021 from Rs 383.21 crore for the same period last year, the decline was a result of post-COVID-19 related restrictions and profit after tax more than doubled to Rs 19.81 crore for Fiscal 2021 from Rs 7.86 crore for Fiscal 2020. For nine month ending December 2021, revenue from operations stood at Rs 219.37 crore and profit after tax at Rs 3.03 crore.
Water resource in India refers to surface water (rivers, lakes, ponds, etc.) and groundwater; and does not include water generated from desalination and recycle/reuse techniques. The Indian total utilizable water resource is pegged at 1,122 billion cubic meters ("BCM") per year by the Ministry of Jal Shakti. According to the F&S report mentioned in the DRHP, the industrial water and wastewater treatment solutions market was valued at Rs 6500 crore in Fiscal 2021. For the calendar year 2018, of the total utilizable water, 761 BCM was consumed by all end user segments and is estimated to be 1498 BCM by 2030.
DAM Capital Advisors Limited and Equirus Capital Private Limited are the book running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.