IPO listed on 27 Dec'24
Concord Enviro Systems Ltd
Minimum Investment
₹ 14,721 / 21 shares
Grey market premium
₹ 138 (20% premium)
Issue price
₹ 701
Listing price
₹ 826
Listing gains
125 (18%)
Listing on
Dec 27, 2024
Our Verdict:
Neutral
- Concord Enviro Systems Ltd (Concord) exhibits an impressive financial performance, with revenue and net profit growing at an annual rate of 23% and 59%, respectively, between FY22-24.
- The company reported a three-year average Return on Equity of 7.3% and Return on Capital Employed of 6.9%.
- At the upper price band, the P/E multiple works out to 35x and P/BV 2.9x. Growth opportunities in water infrastructure are promising, but competition from larger players remains a challenge.
- Given these factors, it is advisable for investors to closely monitor the company's financial performance and operational execution in the next couple of quarters before making investment commitments.
About the company
Founded in
1 Jul'99
Managing director
Prayas Goel
- Concord is a global provider of water and wastewater treatment and reuse solutions, specializing in Zero Liquid Discharge (ZLD) technology. The company possesses full in-house capabilities that span designing, manufacturing, installation, commissioning, as well as operation and maintenance services.
- Concord also integrates digitalization solutions, including Internet of Things (IoT), into its offerings. The company's revenue streams include the sale of systems and plants, operations and maintenance of these installations, and the provision of consumables and spares for the plants they service.
STRENGTHS
- Impressive Financial Growth: Concord has exhibited remarkable growth, with operational revenue, EBITDA, and net profit seeing substantial compounded annual growth rates (CAGRs) of 23%, 15%, and 59%, respectively, from FY22 to FY24.
- Robust Order Book: Concord's order book was valued at Rs 501.75 crore as of August 31, 2024, providing strong revenue visibility for the foreseeable future.
- Strong Profitability: Concord reported an EBITDA margin of 16.33% and a net profit margin of 8.34% for FY24, ranking it among the top in profitability compared to its listed peers.
RISK FACTORS
- Low Capacity Utilization: Concord's capacity utilization has been below optimal levels, with rates under 34% for the five months ending August 31, 2024, and under 40% for FY24. Persistently low capacity utilization could lead to increased production costs and reduced profitability, negatively impacting the company's business, operational results, and financial condition.
- Client Concentration: Concord's top 10 customers represent nearly 55% of the operating revenue for the five months ending August 2024 and FY24. The loss of any major customer or significant contract could critically affect the company's financial stability and overall performance.
- Loss-Making Subsidiaries: Two of Concord’s subsidiaries have incurred losses in the five months period ending August 31, 2024. Continued losses could significantly impair the company’s overall financial health, cash flows, and operational results.
- Substantial Working Capital Needs: As of August 31, 2024, and FY24, Concord required substantial working capital, with outstanding loans of Rs 144 crore and Rs 130 crore, accounting for 23% and 21% of total assets respectively. Inability to meet these requirements could materially impact the company's business operations and financial health.
- Legal Challenges: Concord faces 21 ongoing legal disputes involving its promoters, subsidiaries, and certain directors. Any adverse outcomes could result in significant liabilities or penalties and damage the company's reputation, business, and financial standing.
Issue details
Issue type
Mainstream
Issue size
₹ 500.33 crore
Fresh Issue
₹ 175 crore
OFS
₹ 325.33 crore
Price range
₹ 665 - 701
Lot size
21 shares
Issue Objective
Concord intends to utilise the net proceeds from the fresh issue for:
- Funding capital expenditure for the UAE Project at Concord Enviro FZE to develop a unit assembling water treatment systems;
- Expanding manufacturing, storage, and support at Rochem Separation Systems (India) Pvt Ltd through the Vasai Project;
- Purchasing plant and machinery;
- Prepaying or repaying Concord Enviro FZE's existing loans, either partially or in full;
- Supporting working capital needs of Concord Enviro FZE;
- Growing the pay-per-use business at Reserve Enviro Pvt Ltd;
- Investing in technology and initiatives to enter new markets; and
- General corporate purposes.
Dates
Bidding open
19 Dec'24
Bidding close
23 Dec'24
Allotment date
24 Dec'24
Refund date
26 Dec'24
Listing
27 Dec'24
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>35%
Retail individual investors
>15%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
This document has been issued by Liquide Solutions Private Limited for information purposes only. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall Liquide Life Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.