Concord Enviro Systems IPO - Should You Subscribe? Read DRChoksey's Analysis

Deven Choksey Research Report

Concord Enviro Systems Ltd., a prominent player in the water and wastewater treatment sector will launch its initial public offering on December 19 and the offer closes for subscription on Dec. 23. The company has fixed the price band in the range of Rs 665 to Rs 701 per share.

The Rs 500.33 crore IPO comprises of fresh issue size of Rs 175 crore and the remaining Rs 325.33 crore as an offer for sale.

The allotment for the Concord Enviro IPO is expected to be finalized on December 24, 2024.

The shares will be listed on the exchange on  Dec. 27.

Objects of the Offer

• Investment in its wholly owned Subsidiary and joint venture,

• Funding capital expenditure requirements,

• Investment in technology and other growth initiatives for access to new markets,

• General Corporate Purposes.

Outlook and Valuation:

Concord Enviro Systems is a prominent player in the water and wastewater treatment sector, offering end-to-end water treatment services, from design and installation to maintenance and operation. Concord Enviro demonstrates a strong order book of Rs 5,017.5 million as of August 2024, with 74.5% derived from systems and plants and 25.5% from after-sales services, reflecting predictable revenue streams.

The water treatment sector’s growth, driven by government regulations, rising water scarcity, and sustainability goals, offers significant long-term expansion opportunities for CES.

At the upper end of its IPO price band of Rs 701 (P/E: 35.0x), Concord Enviro presents an attractive opportunity, supported by its strong growth prospects, technological differentiation, and global presence across high-demand regions like India, the UAE, and Mexico.

The company’s strategic initiatives, including capacity expansion, IoT adoption, and the Pay-Per-Use business model, position it for scalable growth and sustained profitability.

Given Concord Enviro’s robust fundamentals, strong order book, innovative solutions, and alignment with global sustainability trends, we assign a ‘Subscribe’ rating to the IPO.

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