Concord Enviro Systems IPO: Price Band, Financials And More — All You Need To Know

Concord Enviro Systems Ltd.'s Rs 500.3-crore initial public offering, which is scheduled to open on Thursday, consists of a fresh issue of Rs 175 crore and an offer for sale of Rs 325.3 crore.

The price band for the IPO has been set between Rs 665 and Rs 701 per share. The market value at the upper end of the price band is Rs 1,451 crore.

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. The allotment is expected to be finalised on Dec. 24.

IPO Details

• Issue opens: Dec. 19.

• Issue closes: Dec. 23.

• Issue price: Rs 665–701 per share.

• Offer for sale: Rs 325.3 crore.

• Fresh issue: Rs 175 crore.

• Total issue size: Rs 500.3 crore.

• Lot size: Minimum 21 shares.

Use Of Proceeds

• Investment in wholly owned subsidiary Concord Enviro FZE for financing its capital-expenditure requirements for a greenfield project to develop an assembly unit to assemble systems and plants for treatment of water, waste water and related membrane modules

• Investment in wholly owned subsidiary Rochem Separation Systems (India) Pvt. for financing its capex requirements for the brownfield project to expand the manufacturing facilities, storage and supporting activities

• Investment in Concord Enviro FZE for prepayment or repayment of all or a portion of certain outstanding borrowings, as well as working-capital requirements

• Investment in joint venture Roserve Enviro Pvt. to grow pay-per-use/pay-as-you-treat business

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

Business

The company is a global provider of water and wastewater treatment and reuse solutions, including zero-liquid-discharge technology. It has in-house capabilities to develop solutions across the entire value chain, including designing, manufacturing, installation and commissioning, operation and maintenance, and digitalisation solutions, including internet of things.

The sources through which the business generates revenue include

• Sale of systems and plants

• Operations and maintenance of installed plants and

• Supplying consumables and spares for installed plants

Key Risks

• The capacity utilisation has been low, which exposes the company to higher production costs and lower profitability.

• The business is dependent on and derives a substantial portion of its revenue (more than 50%) from its top 10 customers.

• The company's subsidiaries have incurred losses in fiscals 2024 and 2022.

• If the company does not successfully develop new wastewater treatment membranes, systems and plants in a timely and cost-effective manner, the business operations may be affected.

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