Concord Environ Systems Limited has managed to create waves in terms of its IPO. With this, the company gained attention from investors and industry fans. The company deals in water and wastewater treatment sector; hence, it caters to global markets. In the blog, we are going to discuss the company‘s profile, business model, financials, and everything related to its IPO.
Concord Environ Systems Limited
Concord Environ Systems Limited is an innovative water and wastewater treatment solution provider in the entire globe. As there’s an increasing demand for more sustainable practices in the world of industrial and municipal water management, the company has now emerged as a ‘one stop’ partner for the needs of industries, governments and export markets.
Core Business
The company offers diversified products and has been environmentally responsible. Its commitment towards sustainability makes it unique compared to other companies in its line of business. Some details about its core business are as follows:
Zero Liquid Discharge Technologies
Specializing in solutions that do not discharge any liquid waste, Concord Environ Systems has products for industries looking to stick to the strictest possible environmental regulations.
Comprehensive Services
The company provides end-to-end water treatment solutions, starting from design and manufacturing up to installation, operation, and maintenance. By incorporating cutting-edge technologies like IoT, they optimize the process of water treatment for efficiency and effectiveness.
Client Segments
The clientele ranges from pharmaceuticals and chemicals to automobile and residential housing societies. Governments and industrial giants rely on their expertise as well.
Global Presence
With export markets in North America, Latin America, Africa, the Middle East, and Southeast Asia, Concord Environ Systems has an impressive international presence.
Client Portfolio
The company has an impressive client portfolio, having served 377 clients across the globe. Some of its notable clients are:
Domestic: Grasim Industries, Anthem Bioscience, Kashyap Sweeteners.
International: Diego Mexico, SA DCV, Agros.
It shows that they can service both domestic and international markets, which makes them operational flexible and scalable.
Business Segments
Three major business segments in which Concord Environ Systems operates are as follows:
- Manufacturing & Sales
- Water and wastewater treatment systems.
- Spare parts, consumables, and chemicals for running the system.
2. Operations & Maintenance
- Long-term service contracts to ensure trouble-free running of installations.
3. Compressed Biogas Plants
- A relatively new and emerging segment with a focus on energy optimization and sustainability.
IPO Details
The IPO of Concord Environ Systems Limited is an issue that is a mix of fresh issue and offer for sale. Here are the details:
Size & Allocation
Total issue size: ₹100 Crore.
Fresh Issue:₹35 Crore (35%)
Offer for Sale (OFS): ₹65 Crore (65%)
Investor Categories
Retail Investors: Lot size of 21 shares, priced at ₹14,721 for one lot.
HNIs: No lock-in period; investments start above ₹2 Lakh.
Use of Funds
A large part of the money will be going into the OFS, which means that not much capital will directly go to the company’s expansion or growth initiatives.
Financial Performance Analysis
Let’s see how Concord Environ Systems Limited has performed financially and what it means for potential investors:
Revenue Growth
The company has shown great growth:
- 2023: ₹330 Crore.
- 2024: ₹512 Crore.
This growth shows how well they can scale up their operations and capture market demand.
PAT
The company has managed a better profit margin of 8%, but PAT varied from year to year. This trend should be observed closely by investors.
Borrowings
Borrowing increased from ₹125 Cr in the last four years to ₹170 Cr.
Reserve
Reserves have steadily increased, but the higher debt level suggests that it’s leveraging financial resources for expansions.
Key Ratios
Return on Equity (ROE): 13% The profitability is moderate and moderate.
Debt-to-Equity Ratio: 0.47 is not very threatening but reveals rising debt.
Price-to-Book Ratio: 4x might be over-valued as compared to the financials.
Peer Comparison & Sector Analysis
Sector Opportunities
Water and waste water management will gain a tremendous upsurge as more industries and governments focus on sustainability. Strict regulations coupled with efficient use of resources is forcing them to become part of this demand.
Risk
Debt of Concord Environ Systems includes,
Rising debt burden destabilizes financial conditions.
Irregular margins that might scare off risk-averse investors.
Little utilization of IPO funds towards direct business expansion since most would be channeled toward the OFS.
Why Invest in Concord Environ Systems Limited IPO?
Here are some opportunities that this IPO presents to investors:
Growth Potential
The company operates in a high-demand sector with immense growth opportunities globally. Their innovative solutions, such as zero liquid discharge technologies, are becoming essential for industries that want to achieve sustainability goals.
Global Presence
A diversified client base spanning multiple industries and geographies reduces dependency on a single market. This ensures a stable revenue stream.
Experienced Management
Concord Environ Systems can serve 377 clients worldwide, and such a capability is indicative of the operational expertise and the company’s leadership in the water treatment sector.
What to Watch Out for
Despite the merits of an IPO, potential investors should also keep an eye on the following factors:
- The high percentage of OFS means that only a fraction of funds would be used for company growth.
- Rising levels of debt may impact future profitability and financial flexibility.
- Inconsistent profit margins require a prudent approach.
Conclusion
Concord Environ Systems Limited IPO is a unique investment opportunity in the growing industry with global significance. This company is one of the leaders in water and wastewater treatment solutions with a promising future. However, investors have to be cautious regarding the trends of financial and risks that come with the IPO.
Whether you’re a retail investor or an HNI, Concord Environ Systems’ IPO could be a compelling addition to your portfolio, especially if you’re optimistic about the water management sector’s long-term potential.
Disclaimer: This is for informational purposes only. Please consult a financial advisor before making investment decisions.
