Techknowgreen Solutions coming with an IPO to raise Rs 16.72 crore

Techknowgreen Solutions 

• Techknowgreen Solutions is coming out with an initial public offering (IPO) of 19,44,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 86 per equity share. 
• The issue will open for subscription on September 18, 2023 and will close on September 21, 2023.
• The shares will be listed on BSE SME.
• The share is priced 8.60 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Indorient Financial Services.
• Compliance Officer for the issue is Vinayak Chindak.

Profile of the company

The Company is engaged in the business of ‘providing consulting services in almost every realm of environment & infrastructure planning, solutions to every problem of environment & climate change, which are both environmentally as well as economically feasible. It is environmental consulting company with many years of experience, headquartered in Pune, India. It key offerings include Consulting - Regulatory Sustainability, Technology - Execution Info Tech and Research - Policy Engineering. It is one of the first companies in India providing environmental IT solutions through cutting-edge software applications and compliance solutions. 

It has diverse experience in handling complex projects across various industries like infrastructure, chemical, automobile, healthcare, manufacturing, real estate and national/state governments. Its client base includes government, semi government organization, MNCs, large companies, mid-size companies and MSMEs. The company has established itself in 3 verticals i.e. Consulting - Regulatory Sustainability, Technology - Execution Info Tech and Research - Policy Engineering, all of them being part & parcel of the overall plan & strategy of growth & development of the company’s footprint as well as expanse in near future.

Proceed is being used for:

• Investment in research and development (R&D) initiatives which includes hiring of experienced R&D resources and purchase of equipment to support R&D initiatives.
• Investment in office premises.
• Refurbishment of new office premises and purchase of office equipment’s.
• Expansion of its execution and support service teams including hiring of resources with expertise in environmental consulting.
• Repayment of bank facilities.
• General corporate purposes.

Industry overview

India is faced with the challenge of sustaining its rapid economic growth while dealing with the global threat of climate change. This threat emanates from accumulated greenhouse gas emissions in the atmosphere, anthropogenically generated through long-term and intensive industrial growth and high consumption lifestyles in developed countries. In charting out a developmental pathway which is ecologically sustainable, India has a wider spectrum of choices precisely because it is at an early stage of development. The Country’s vision is to create a prosperous, but not wasteful society, an economy that is self-sustaining in terms of its ability to unleash the creative energies of its people and is mindful of its responsibilities to both present and future generations.

India ranks seventh on the Global Climate Risk Index. The country is looking toward disaster resilient and energy-efficient infrastructures. All these factors are driving the growth of the environmental consulting services market in the region. The Indian Environmental consulting services market size that stands at $0.75 billion in 2020 is projected to reach $1.1 billion by 2026 at a CAGR of 6.6%.  

The consultancy firms are helping businesses to create differentiated strategies to reduce the carbon intensity and greenhouse gas emission of their operations, supply chain and product mix; build new business models and capabilities to cash in on new opportunities in energy transition and energy efficiency; to modify their portfolio mix that minimises risk and maximises growth, and make investments in offsets that will ensure full contribution to the net-zero equation.

Pros and strengths

Robust execution capabilities: Management’s deep expertise allows it to understand clients' environment and sustainability challenges. The company’s faster execution of complex consulting projects due to its vast experience across wide array of assignments. It Ability to quickly mobilize expert execution teams across any part of India.

Across multiple sectors: The company’s work across core polluting industries like Chemicals & Fertilizers, Pharma, Food, Infrastructure, Distilleries, etc. It executing projects across newer sectors like Data Centers, R&D Setups and ESG.

Many innovative executions: The Company Implemented first ever circular economic wetland technology demonstration for 1 Mn Liters /day at Kotawali Nallah in Chiplun to resolve the issue of contamination (Year 2022). It Supported the first ever Majhi Vasundhara Evaluation of 800 local bodies & now 17,000 for State Government. The company’s strong feedback over competitors through value added quality and timely out of box economic solutions. 

Risks and concerns

Face competition: The environmental consulting industry is competitive and it expects competition to increase in the future from established competitors and new market entrants. It faces competition including from large global consulting Firms like KPMG, E&Y, PWC and Deloitte. These companies could have significant name recognition, considerable resources and existing IT infrastructures and powerful economies of scale and scope, which allow them to rapidly develop and deploy new solutions. In addition, some of its competitors may enter into new alliances with each other or may establish or strengthen cooperative relationships with third-party consulting firms, or other parties.

Revenues are dependent on few customers: It derives a significant portion of its revenues from a limited number of customers. For the year ended March 31, 2023, 2022 and 2021 its top 10 customers other than government and semi-government cumulatively accounted for approximately 51.65%, 26.92% and 30.82% respectively of its total revenue from operations as per the Restated Financial Statements. In the event any one or more customers cease to continue doing business with it, its business may be adversely affected. The loss of such customers may be caused mainly because of competition and technological advancements. There may be factors other than its performance, which may not be predictable, which could cause loss of customers.

Dependents on Key Managerial Personnel: Its performance depends largely on the efforts, expertise and abilities of its Key Managerial Personnel, senior management and its operational personnel who possess significant experience in the industry in which it operates. It considers that the inputs and experience of its KMP and senior management, in particular, and other key personnel are valuable for the development of its business, operations and the strategic directions taken by the Company. It cannot assures that these individuals or any other member of its senior management team will not leave it or join a competitor or that it will be able to retain such personnel or find adequate replacements in a timely manner, or at all. It may requires a long period of time to hire and train replacement personnel when qualified personnel terminate their employment with the company.

Outlook

Techknowgreen Solutions is engaged in the business of ‘providing consulting services in almost every realm of environment & infrastructure planning, solutions to every problem of environment & climate change, which are both environmentally as well as economically feasible. On the concern side, it faces competition including from large global consulting Firms like KPMG, E&Y, PWC and Deloitte. These companies could have significant name recognition, considerable resources and existing IT infrastructures and powerful economies of scale and scope, which allow them to rapidly develop and deploy new solutions

The company is coming out with an IPO of 19,44,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 86 per equity share to mobilize Rs 16.72 crore.  On performance front, the company’s total revenue increased by 48.76% to Rs 1,486.28 lakh for the Financial Year 2023 from Rs 999.09 lakh for the Financial Year 2022. The profit after tax increased by 317.26% to Rs 451.37 lakh for the Financial Year 2023 from Rs 108.18 lakh for the Financial Year 2022. Going forward, the company’s intends to strengthen in-house R&D team through resource addition & infrastructure expansion. It Tie-ups with major IITs and Internationally acclaimed Universities. It Enplanements of environmental professors and experts on board.