Antony Waste Handling Cell IPO : Money Maker or Money Waster ?

Antony group is involved in serving government and private companies with automotive body building and ancillary services. Antony waste handling cell is a subsidiary of Antony group involved in providing waste management services. It commenced its business in 2001. The company deals majorly with municipal solid waste (MSW) management services (collection and transport). From January 1, 2020 this group has taken up 25 major projects and has successfully accomplished 7 of them. The remaining ones are under progress. Antony waste handling cell IPO is set to launch on 21st December.

Out of the 18 remaining projects, 12 are for MSW (collection and transport), 2 MSW processing and the rest are for mechanic sweeping. Currently the company deals in major parts of Mumbai, Delhi, Jaipur, Haryana and Bangalore. The company owns 1147 vehicles and has been serving private players like Jaypee international sports.

The company is among the top 5 players in Municipal waste management services.

IPO Details

The company is set to launch a 300 crore Rs IPO from December 21. The OFS contains 13.30 lakh shares of Leeds, 20.85 lakh shares of Tornbridge, 11.59 lakh shares of Cambridge and 21.90 lakh shares of Guildford. All these are from Mauritius. The listing date is 1st January, 2021 and the Face value per share is 5 Rs.

IPO DATE 21st DEC – 23rd DEC
ISSUE TYPE BOOK BUILT ISSUE
ISSUE SIZE 300 crore Rs.
FRESH ISSUE 85 crore Rs.
OFFER FOR SALE 68.24 lakh shares
IPO PRICE 313 Rs – 315 Rs
LOT SIZE 47 shares (14805 Rs.)
Plan for Raising Capital

The company is planning to use the borrowed capital for expansion and development of its project in Pimpri by investing in its subsidiaries. The project is for conversion of waste into energy. General corporate purposes can also be fulfilled by the funds raised. The company is stating that it will reduce its borrowings by infusing the money in form of debt into its subsidiaries AG environment and ALESPL.

Company Financials  (Standalone)
CATEGORIES (in crore Rs.) MARCH’18  MARCH’19 MARCH’20
ASSETS 133.80 150.46 142.61
REVENUE FROM OPS. 53.25  58.61 464.61
EBITDA (13.58) 83.6 98.6
PAT (13.85) 31.51 62.07

The significant rise in company’s revenue is due to operational capacity of its new projects at Pimpri and Nagpur and obtaining new orders from Noida municipal and Borivali municipal.

Investors Quota
QIB 50% (60% of it can be subscribed by anchor investors)
NII (HNI’S) 15%
RETAIL INVESTORS 35%

The company previously was going to launch its IPO in March 2020 but due to pandemic it cannot get the required bids. Previously the IPO was planned at 200 crore Rs. and now the amount has increased to 300 crore Rs. The increased amount may also be aimed to meet the interest payments from moratorium availment. Also it can be for loading additional debt into subsidiaries due to lack of business during lockdown.

The company is planning to improve its capacity for handling MSW waste. The expanded capacity is aimed at 6500 Tonnes.  It is the second largest player in India for MSW (C&T). The company is going to get listed on both BSE and NSE.

Pros
Company has more than 7300 employees and 1147 vehicles out of which 80% are GPS enabled.
19 years of successful business and a pioneer in landfill business in India
Profit making company since two years
Among top 5 companies in its segment
Diversified business portfolio
In- house business for automotive parts
Cons
Weak on cash in hand
Failure at listing once before lockdown
Depends on municipalities for major projects and has a great competition outside
Dependence on local labour
Lack of spread in business activities
Initial time period for the company hence a risky bet for long term
Availed for moratorium

The company availed for moratorium and hence EMI have been started. Also it’s MSW business saw a decline due to the stoppage of commercial activities during lockdown. Due to this the tonnage of MSW declined significantly which affected its business. The company expects that the operation and tonnage amount would come back to routine on an average basis soon.

The major competitors of the firm are Ramky Environment and Vermigold Ecotech. Ramky is the market leader currently but no companies in the waste management segment are listed. The distinguishing factors for Antony are in-house expertise in landfill management, reasonable number of ongoing projects and growth potential in the MSW C&T segment.