Concord Enviro System Eyes Capacity Expansion, Mexico Market From IPO Proceeds

Concord Enviro Systems Ltd., a global provider of wastewater treatment solutions, will tap the primary market to raise funds for paring debt and investing in capacity expansion, and is also eyeing major growth markets like Mexico, senior company executives told NDTV Profit on Monday.

The company's IPO will comprise a fresh issue worth Rs 175 crore and an offer-for-sale of 46.40 lakh shares by promoters and a major foreign investor, according to the red herring prospectus.

Of the proceeds from the fresh issue, Rs 50 crore will be used to repay debt and strengthen balance sheet, Executive Director Prerak Goel said. The company has Rs 150 crore debt on its book.

Furthermore, Rs 20 crore will be used for working capital, Rs 38 crore for capex and another Rs 23 crore will be used for technological upgrades, Goel said.

Giving an overview of the company's business, he said the main manufacturing facility in Vasai, Maharashtra, caters to domestic clients and also partly supplies for overseas orders. While, the Sharjah plant in the United Arab Emirates caters to export market and develops modules for systems.

The company's current order book is of around Rs 500 crore, excluding the compressed biogas plants business. "Of this, after sales is Rs 116 crore and new fresh equipment and project sales is Rs 370 crore," Goel said.

Concord Enviro Systems is targeting the Mexico market, where it will be exporting products from its India and UAE plants. "The local unit will be looking for last-mile execution like operation and maintenance contracts. Currently, we are working with Diageo which is setting up a greenfield project," the executive director said. The O&M contracts typically range from one to three years.

Concord Enviro Systems Chairman and Managing Director Prayas Goel said the company is currently focused on industrial wastewater treatment from private clients and does not have government contracts. He said the core technology offering is wastewater reuse and sees government or municipal contracts coming in that space in the future.

The initial public offering of Concord Enviro Systems will open for bidding at a price band of Rs 665 to Rs 701 per share, according to the price band advertisement on Monday.

Bids can be made for a minimum of 21 shares, and then in multiples thereof. Concord Enviro filed its preliminary papers with the capital markets regulator on Aug. 28.

Promoters divesting shares in the OFS include Prayas Goel, Prerak Goel, Pushpa Goel, Nidhi Goel and Namrata Goel.

Motilal Oswal Investment Advisors Ltd. and Equirus Capital Pvt. are the lead book running managers for the issue.

Notably, Concord Enviro Systems is a provider of water and wastewater treatment and reuse solutions to domestic and international clients. The company exports to countries in North America, Latin America, Africa, the Middle East, and Southeast Asia, serving 377 customers worldwide.