Concord Enviro IPO opens today; Check GMP, price band: Should you bid?

Concord Enviro IPO: Concord Enviro Systems Limited IPO (Concord Enviro IPO) opens for subscription today, December 19, 2024. 

 

The Concord Enviro IPO is a book-built issue, with a total size of Rs 500.33 crore. Concord Enviro IPO is structured as a combination of a fresh issue and an offer for sale (OFS). The fresh issue consists of 0.25 crore shares, which will raise Rs 175 crore, while the OFS involves 0.46 crore shares, amounting to Rs 325.33 crore.

 

The issue is scheduled to close on December 23, 2024. In a strong show of confidence, Concord Enviro has already raised Rs 150.10 crore from anchor investors, signaling positive market interest ahead of the public offering. 

 

Founded in July 1999, Concord Enviro Systems is a global provider of water and wastewater treatment and reuse solutions, including advanced zero-liquid discharge (ZLD) technology. The company specialises in delivering comprehensive, in-house solutions that span the entire value chain, from design and manufacturing to installation, operation and maintenance (O&M), and digitalisation using Internet of Things (IoT). 

 

With two manufacturing facilities located in Vasai, India, and Sharjah, UAE, and an in-house research and development (R&D) team of 21 employees as of March 31, 2024. The company exports its services to North America, Latin America, Africa, the Middle East, and Southeast Asia, boasting a diverse customer base of 377 clients, including both domestic and international industries.

 

Here is all you need to know about the Concord Enviro IPO:

 

Concord Enviro IPO lot size

 

Retail investors are required to apply for a minimum of 21 shares, which will require an investment of Rs 14,721. The maximum retail lot size is 13 lots, or 273 shares, for a total investment of Rs 1,91,373.

 

Small High Net-Worth Individuals (S-HNIs) need to apply for at least 294 shares (14 lots) for Rs 2,06,094, with a maximum of 1,407 shares (67 lots) for Rs 9,86,307.

 

Big High Net-Worth Individuals (B-HNIs) must apply for 1,428 shares (68 lots) for Rs 10,01,028.

 

Concord Enviro IPO objective

 

Concord Enviro plans to utilise the funds raised from the IPO for several key initiatives. A major portion will be invested in its wholly-owned subsidiary, Concord Enviro FZE (CEF), to support the capital expenditure requirements of a greenfield project. 

 

Additionally, funds will be directed towards another subsidiary, Rochem Separation Systems (India) Private Limited (RSSPL), for expanding its manufacturing facilities and supporting activities as part of the ‘Vasai Project.’ The company also plans to use the funds for the acquisition of new plant and machinery to meet its capital expenditure requirements.

 

Further, a portion of the proceeds will be used to prepay or repay outstanding borrowings by Concord Enviro FZE, improving its financial position. The funds will also help finance the working capital requirements of Concord Enviro FZE to support day-to-day operations.

 

The company intends to invest in its joint venture, Reserve Enviro Private Limited, to boost its pay-per-use/pay-as-you-treat business model, which will enable growth in this segment. The funds will also be allocated towards technology upgrades and other growth initiatives aimed at expanding into new markets, ensuring continued innovation and market penetration. Finally, a portion of the funds will be used for general corporate purposes to support the company’s overall operations and long-term objectives.

 

Concord Enviro IPO expected allotment, listing date

 

The Concord Enviro IPO allotment is expected to be finalised on December 24, 2024. The  Concord Enviro IPO listing is scheduled for Friday, December 27, 2024, on both BSE and NSE.

 

Concord Enviro IPO GMP

 

The Concord Enviro IPO GMP is Rs 70, indicating an expected listing gain of 9.99 per cent. GMP is Grey Market Premium.

 

Concord Enviro IPO Lead managers

 

The book-running lead managers (BRLM) for the Concord Enviro IPO are Motilal Oswal Investment Advisors and Equirus Capital. The registrar for the issue is Link Intime India..

 

Concord Enviro IPO financials

 

For the FY ending March 31, 2024, Concord Enviro Systems reported a 46 per cent increase in revenue, while its profit after tax (PAT) surged 655 per cent compared to the previous year (March 31, 2023).

 

Should you bid for Concord Enviro IPO?

 

Bajaj Broking, in its analysis of the Concord Enviro IPO, recommends subscribing with a long-term perspective. The firm highlights that the IPO’s valuation looks promising due to the company’s strong financial performance, solid market position, and favorable growth prospects. Concord Enviro has consistently demonstrated revenue growth and profitability, supported by a healthy balance sheet and stable cash flow. Its established reputation in the environmental solutions sector, combined with long-term contracts and a diversified customer base, strengthens its market stability. With a strong focus on innovation, sustainability, and expansion, the company is well-placed to capitalise on the growing demand for environmental solutions, particularly in response to stricter regulatory requirements. 

 

SMIFS Limited cited the company’s strategic positioning for strong future growth in the rapidly expanding industrial wastewater recycling and reuse market. Valued at $80.6 billion in 2023, this market is projected to grow at a compound annual growth rate (CAGR) of 8.3 per cent, reaching $120 billion by 2028. Concord Enviro’s strategic initiatives are well-aligned to capitalise on this growth, particularly in regions with major water scarcity such as Africa, the EU, and the Middle East.

 

Moreover, the company’s ‘pay-per-use/pay-as-you-treat’ model allows clients to access wastewater treatment systems on a rental basis, which helps reduce large capital expenditures while enhancing recurring revenue. Concord is also expanding its presence in high-water-consuming sectors like paper mills, refineries, power plants, and treated sewage plants, diversifying its revenue streams further.

 

Concord's proactive approach to reducing its debt by Rs 50 crore will also positively impact its profitability. SMIFS recommends subscribing to the IPO as a long-term investment, anticipating optimal utilisation of existing and upcoming facilities, backed by stable industry growth.