Antony Waste Handling Cell coming with an IPO to raise upto Rs 210 crore

19 Dec 2020

Antony Waste Handling Cell

  • Antony Waste Handling Cell is coming out with a 100% book building; initial public offering (IPO) of 66,66,342 shares of Rs 5 each in a price band Rs 313-315 per equity share.
  • Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
  • The issue will open for subscription on December 21, 2020 and will close on December 23, 2020.
  • The shares will be listed on BSE as well as NSE.
  • The face value of the share is Rs 5 and is priced 62.60 times of its face value on the lower side and 63.00 times on the higher side.
  • Book running lead manager to the issue are Equirus Capital and IIFL Securities.
  • Compliance Officer for the issue is Harshada Rane.

Profile of the company

The company was originally incorporated as ‘Antony Waste Handling Cell Private Limited’, under the provisions of the Companies Act, 1956, pursuant to certificate of incorporation issued by the Registrar of Companies, Maharashtra at Mumbai (RoC) on January 17, 2001. Thereafter, the company was converted into a public limited company pursuant to a special resolution passed by Shareholders of company at the Extraordinary General Meeting held on December 12, 2018. The name of company was changed to its present name ‘Antony Waste Handling Cell Limited’, pursuant to a fresh certificate of incorporation issued by the RoC on December 17, 2018.

The company is one of the top five players in the Indian MSW (municipal solid waste) management industry with an established track record of 17 years, providing full spectrum of MSW services which includes solid waste collection, transportation, processing and disposal services across the country, primarily catering to Indian municipalities. It is among the select few who have pioneered in MSW collection and transportation sector. It is among the key players in landfill construction and management sector with in-house expertise for landfill construction along with its management. It is also present in the emerging waste management area in India which is MSW based WTE. The company primarily undertake: (i) MSW C&T projects which involve door to door collection of MSW from households, slums, commercial establishments and other bulk-waste generators (community bins) from a designated area through primary collection vehicles like compactors, dumper placers and tippers and transportation of these materials, to the processing facility, transfer station or a landfill disposal site.; (ii) MSW processing projects which involve sorting and segregating the waste received from MSW C&T, followed by composting, recycling, shredding and compressing into RDF, as required; and (iii) mechanized sweeping projects which involve deploying of power sweeping machines, manpower, comprehensive maintenance, consumables, safe disposal of the waste and any other items required for completion of the cleaning operation of the designated areas, through ourselves and/or its Subsidiaries.

The company’s foothold in the solid waste management industry can be traced back to the incorporation of company in 2001. Starting with a simple business of collection and transportation of waste, the company has come a long way in the field of solid waste management with adoption of latest technologies and innovations thereby transforming this business itself into a complex operation system with the use of technologies in garbage compaction, processing, use of transfer stations, management of sanitary engineered landfills. As of November 15, 2020, the company had a fleet of 1,147 vehicles. It procures components for vehicles and equipment, mostly from leading international suppliers, including from Compost System GmbH.

Proceed is being used for:

  • Part-financing for PCMC WTE Project through investment in company’s subsidiaries, AG Enviro and/or ALESPL.
  • Reduction of consolidated borrowings of the company and subsidiaries by infusing debt in subsidiary - AG Enviro for repayment / prepayment of portion of their outstanding indebtedness.
  • General corporate purposes.

Industry overview

In India, municipal solid waste is managed in two ways: Centralized and Decentralized Waste Management Approaches. The centralized approach is also termed as Integrated Solid Waste Management and is a technology-driven system for handling bulk wastes at a central processing facility. At the processing facility, value is derived out of waste in the form of compost, incineration, Refuse Derived Fuel (RDF), plasma gasification, and biomethanation. Cities such as Mumbai, Delhi, Navi Mumbai, Pune, Hyderabad and Guwahati have adopted this approach where all services are bundled across the value chain ensuring economies of scale and commercial viability. In the decentralized method, waste is managed by various small waste management centers within the locality. These centers are run by either profit-making or not-for-profit organizations engaged in collecting, transporting and processing around 2 to 20 metric tons of waste from the surrounding locality/ies. These small centers are mainly engaged in making compost out of the organic content in the waste besides selling recyclables such as plastic and glass to local traders and scrap dealers. This approach is not suitable if the demand is for electricity generation and occupies space within each locality/residential colony which may be opposed by people residing in that vicinity.

Currently, around 80% of the municipal solid waste generated in India is being collected and transported whereas only 25% gets processed. In a major cleanliness drive, the Central Government has set a target to move up from 25% to 100% scientific processing and disposal of Municipal Solid Waste by 2019 under ‘Swachh Bharat Mission’. Although this target looks very ambitious, it has set a vision and platform for significant growth of solid waste management industry in India in the coming years. MSW in India generally consists of compostable/biodegradable, recyclables and inerts. Compostable/ biodegradable/ organic items are food waste, from households, retail/wholesale markets and institutions such as hotels and restaurants, which account for around 48% of the overall waste composition. Recyclables include paper, plastics, metal and glass and account for 19% of the total MSW composition. The Indian Waste Management Services market is in its growth stage and is gaining global attention. In order to tackle the mounting problem of solid waste, the Ministry of Environment and Forests (MoEF) legislated Waste Management and Handling Rules promoting the involvement of private agencies in waste collection, treatment and disposal.

Pros and strengths

Leading service provider in MSW management sector with end-to-end capabilities:  The company is one of the top five players in the Indian MSW management industry with an established track record of 17 years, providing full spectrum of MSW services which include solid waste collection, transportation, sweeping, processing and disposal services across the country, primarily catering to Indian municipalities. It is among the key players in landfill construction and management sector with in-house expertise for landfill construction along with its management. It is also present in the emerging waste management area in India which is MSW based WTE. The company has developed internal capabilities across various stages of solid waste management projects, commencing from collection to disposal, which has enabled it to grow into a comprehensive service provider. It has focused on sustainable growth through careful selection of projects, reasonable bidding and thrust on cost management which have contributed significantly to its evolution as one of the key players in the MSW management sector.

Strong track record of project execution: The company has an established track record of 19 years in executing solid waste projects. It primarily undertakes specialized MSW C&T projects, MSW Processing projects and mechanized sweeping projects for municipalities and private players. Having undertaken more than 25 projects as of November 15, 2020, of which 18 are ongoing, the company has a demonstrated track-record as a comprehensive service provider equipped with the resources to handle large-scale projects for municipalities and private players. It carefully selects its projects by taking into consideration key factors such as the potential for project clustering and operational risks. It strives to cluster its projects geographically to improve efficiency and profitability. By leveraging the manpower and equipment that is setup at nearby sites, the company attempts to rationalize transportation costs and investment in new vehicles, thus achieving economies of scale.

Diversified business model: The company’s project portfolio is diversified across services provided, counterparties, project duration, nature of contracts and geographical areas where it operates. Its revenues across all its projects are based on rates agreed-upon at the beginning of the project for the particular period under the project contract, and the actual work undertaken. It has maintained focus on viability of its projects which includes rationale bidding and focus on contracts with pass-through for escalation in certain expenses such as labour and fuel thereby minimizing the financial risk from any contract. It also attempt to minimize counterparty credit risk in most of its contracts by assessing the financial viability of the projects and the awarding authorities prior to bidding for contracts.

Access to technology backed vehicles, equipment: The company has consistently invested in its fleet of vehicles. As of November 15, 2020, it owns a fleet of 1,147 vehicles, of which 969 were equipped with GPS technology, which allows to operate its projects efficiently. It procures the components of its vehicles and equipment mostly from leading international suppliers, including Compost System GmbH. It has also equipped most of its fleet with GPS tracking devices, to actively monitor movement of its vehicle fleet. This system enables it to operate on optimal utilization as well as maintain its vehicles. It also ensures hassle-free operations and leads to efficiency of its vehicle fleet thus reducing overall transportation costs. With multiple projects in progress at any given time, ready access to such vehicles is essential to its ability to execute existing projects. Easy access to and high availability of modern fleet enables it to undertake complex and challenging projects and complete its projects efficiently and profitably.

Risks and concerns

Dependent on municipal authorities for substantial proportion of business and revenue: The company’s business and revenues are substantially dependent on projects awarded by municipal authorities. It expects that contracts awarded by municipal authorities will continue to account for a substantial proportion of business. Traditionally in India, municipal waste management services have been controlled by relevant municipal corporations. Municipalities have been responsible for developing action plans for MSW management Municipalities need an adequate and recurrent cash flow to provide a service. Poor property tax collection record among municipalities has resulted in negligible revenue generation for them. Many Municipalities have been struggling to fund various solid waste management projects from their own revenue receipts. On average municipalities in India generate only 39% of the funds they spend. Hence, Municipalities are highly dependent on state/central grants/budget allocation to fund various infrastructural projects. Moreover, funds allocated by state or central governments are primarily used in infrastructural projects such as building roads and bridges and less toward SWM projects. Any adverse changes in municipal policies, expenditures or fund allocations may lead to company’s agreements being restructured or renegotiated or terminated and could materially and adversely affect business, financial condition and results of operation.

High working capital requirements: The company’s working capital requirements will increase as it seeks to expand its businesses. Its working capital requirements may also increase if, in certain contracts, payment terms include reduced advance payments or payment schedules that specify payment towards the end of a project. Delays in progressive payments or release of retention money or bank guarantees from its clients may increase its working capital needs. It may also experience significant cash outflows to satisfy any indemnity and liability claims, which may cause liquidity issues, due to which the company might be unable to arrange for the appropriate earnest money deposit to bid for new projects. The company may need to incur additional indebtedness and capital expenditures in the future to satisfy its working capital needs. Continued increases in working capital requirements may have an adverse effect on its financial condition and results of operations.

Rely on limited number of customers: The company has in the past derived a significant portion of its revenue from limited number of customer and it may continue to derive a significant portion of revenue from such customer. The top five clients contributed, 90.78%, 93.70%, 81.76% and 77.55% of its total revenue in Fiscal years 2018, 2019, 2020 and for the six month period ended September 30, 2020 respectively as per the Restated Financial Statements. As company’s business is currently concentrated to a select number of customers, any adverse development with such customer, including as a result of a dispute with or disqualification by such major customers, may result in it experiencing significant reduction in cash flows and liquidity. If company’s customers are able to fulfil their requirements through any of its existing or new competitors, providing MSW services with better quality and / or cheaper cost, it may lose significant portion of its business.

Highly competitive business: There are around 20-30 participants in the MSW management market offering various services. Many infrastructure and environment services companies are present in this market. Logistics companies are also present in this market providing only transportation and fleet management services. The company’s competition varies depending on the size, nature and complexity of the project and on the geographical region in which the project is to be executed. In selecting contractors for projects, clients generally limit the tender to pre-qualified contractors based on criteria such as experience, technical ability, past performance, reputation for quality, safety record, financial strength and the size of previous contracts executed in similar projects with them or otherwise. The company’s ability to meet the qualification criteria in its various business areas is critical to being considered for any project. Additionally, while these are important considerations, price is a major factor in most tender awards negotiated contracts, and its business is subject to intense price competition. Its competitors may be larger, better qualified, and may have better access to financial resources. Its inability to compete successfully with them could materially and adversely affect its business prospects and results of operations.


Antony Waste Handling Cell is one of the top five players in the Indian MSW (municipal solid waste) management industry with an established track record of 17 years, providing a full spectrum of MSW services which includes solid waste collection, transportation, processing, and disposal services across the country, primarily catering to Indian municipalities. The company primarily undertakes MSW collection & transportation (C&T) projects, MSW processing projects, and mechanized sweeping projects. It has a qualified key management team, with diversified experience in the areas of operations, logistics, marketing and finance, which assists the Board in implementing its business strategies and furthering its growth. On the flip side, timely and successful completion of company’s projects is dependent upon the performance of the obligations by its clients or other related parties. Any failure or delay in the performance by clients or related parties could adversely affect the timely execution of projects and reputation. Besides, the company’s insurance coverage may not adequately protect it against certain risks and claims and it may be subject to losses that might not be covered in whole or in part by its existing insurance coverage.

The issue has been offered in a price band of Rs 313-315 per equity share. The aggregate size of the offer is around Rs 208.66 crore to Rs 209.99 crore based on lower and upper price band respectively. On the performance front, the company’s total revenues increased by 55.64% from Rs 2,985.18 million in Fiscal 2019 to Rs 4,646.11 million in Fiscal 2020, which was primarily due to new projects in Pimpri Chinchwad and Nagpur becoming operational, its Noida project and Dahisar-Borivali project, which started in January 2019 and November 2018 respectively being operational for the entire year and increase in revenue contributed by Kanjur project. The company’s net profit after tax for the year increased by 78.99% to Rs 620.76 million in Fiscal 2020 from Rs 346.82 million in Fiscal 2019. The company will continue to expand into states with high GDP, growing urbanization, high standard of living, favourable geographic and climatic conditions. It will continue to focus on geographically clustering its projects to further improve business and financial performance. It intends to continue to focus on improving project execution and operational efficiencies in order to maintain credentials as well as profit margins.

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