Namo eWaste Management
- Namo eWaste Management is coming out with an initial public offering (IPO) of 60,24,000 equity shares in a price band Rs 80-85 per equity share.
- The issue will open on September 4, 2024 and will close on September 6, 2024.
- The shares will be listed on SME Platform of NSE.
- The face value of the share is Rs 10 and is priced 8.0 times of its face value on the lower side and 8.50 times on the higher side.
- Book running lead manager to the issue is Hem Securities.
- Compliance Officer for the issue is Sarita.
Profile of the company
The company is an E Waste collection, disposal and recycling company that offers comprehensive services for recycling of electrical and electronic equipment (EEE) waste like Air Conditioners, Refrigerator, Laptop, Phones, Washing Machine, Fans etc. It is an ISO 9001:2015, ISO 14001:2015, ISO 27001:2022 & ISO 45001:2018 certified company, complying with strict environmental regulations regarding handling hazardous products and disposing them safely to keep its environment green. It is committed towards managing large volume of electrical and electronic equipment waste and able to extract all of the components of an electrical item including precious and semi-precious metals like Copper, Aluminium, Iron etc. Electrical and electronic equipment comprises of many complex materials like batteries, plastics, glass, and ferrous and non-ferrous metals. These materials must be processed carefully to avoid releasing harmful chemicals into the environment. It takes steps to safely recover valuable commodities within e-waste for recycling and reuse. Additionally, it organizes awareness campaigns, collection drives, and events to collect waste and promote public consciousness regarding its safe disposal.
As authorized recyclers it enters into procurement service contracts with these manufacturers and producers to pick up e-waste from their service centres, warehouses and retail outlets. Apart from this E-waste is also sourced through waste aggregators who collect e-waste from consumers by going door to door. It has engaged aggregators across various places in India who form a support for its e-waste collection for EPR. It reaches out to its target audience for procurement of e-waste through various initiatives and marketing strategies like participation in various Events & Expos, conducting awareness campaigns at schools, Media Coverage like featuring in clean India Journal, Economic times, Dainik Bhasker, Delivering talks like speech Jitopreneurs, London etc. After procurement and processing the E-waste, it also issues a certificate of recycling/certificate of dismantling or green certificate (to producers/manufacturers who require to manage their obligation under E-waste Management Rule) which is authorized from the State Pollution Control Board(SPCB) and Central Pollution Control Board (CPCB).
Proceed is being used for:
- Funding the Capital Expenditure requirements of its subsidiary i.e. Techeco Waste Management LLP, towards setting up of a new factory unit at Nashik.
- Meeting working capital requirement
- General corporate purpose
Industry Overview
E-waste is any electrical or electronic equipment that’s been discarded. They are electronic products that are unwanted, not working, and nearing or at the end of their “useful life.” Computers, televisions, VCRs, stereos, copiers, and fax machines are everyday electronic products. E-waste is the fastest growing waste stream in India with 3.2 million tonnes of e-waste generated a year, third highest after China and USA. Fast growing Information and Communications Technology (ICT) sector is one of the prominent contributors to this increasing number of e-wastes. Upgradation and faster obsolescence of electronic products make consumers discard their products quickly, which in turn accumulate huge e-waste to the solid waste stream. Another challenge is that major recycling of e-waste is handled by the informal sector. The methods used for recycling are primitive and hazardous. This adds to the problem of climate change and pollution in India. These prevailing challenges make e-waste sector a major focal point for both government and industry.
Waste management rules were introduced in India in 2011, keeping in mind the dominant role of informal sector and the health and safety challenges that come along with informal handling of e-waste. These rules came into effect from May 1, 2012. Later, e-waste management rules were notified in 2016 in response to implementation issues and other shortcomings of 2011 rules. These rules came into effect from October 2016. These rules were further amended in March 2018.
Extended Producer Responsibility (EPR) of producers are regulated through grant of Registration Certificate and issue Recycling Targets / EPR obligation. For Registration Certificate and Recycling Targets / EPR Obligation producers under these Rules (definition given below) are required to apply on the EPR Portal at the URL eprewastecpcb.in to Central Pollution Control Board (CPCB). This E-Waste EPR Portal is an online E-Waste Management System, where applicant producers can apply online for grant of Registration Certificate and Recycling Targets / EPR obligation. All the stakeholders like Producer, Recyclers, Refurbishers and Manufacturers are required to register themselves on this system.
Pros and strengths
Stringent quality control mechanism ensuring standardized product quality: It employs an extensive and stringent quality control mechanism at each stage of the recycling as well as its recycling process of extracting e-waste from electronic components like laptops, mobile phones etc. which includes functional testing, repair, data destruction, dismantling, segregation of electronic components etc. to ensure that its finished product conforms with the exact requirement of its customers and successfully passes all validations and quality checks. Further, as a certification of the quality assurance, the company has received ISO 9001:2015 for Quality Management System, ISO 14001:2015 for Environmental Management System, ISO 27001:2022 for information Security Management System & ISO 45001:2018 for occupational health and safety management systems.
Diversified revenue from multiple geographies: The company has diversified revenue from multiple geographical locations from various states in India. For the F.Y ending 2023-24, 2022-23 & 2021-22 it has generated around 95.16%, 98.98% and 71.79% of its total revenue from sales in top 05 geographical regions in India. In this period, it had sold its products to around 20 states & Union Territories in India. Its presence in multiple geographies not only helps it in expanding its customer base but also helps it by keeping itself in tune with the latest technological advancements and helps it to mitigate risk for any unforeseen circumstances in the domestic market and expand its business operations.
A dedicated service provider for collection, management and recycling of E-waste material through in-house factory unit: It is an E-waste Recycling Company that offers comprehensive services for recycling of EEE waste which includes various services like e-waste collection, transportation, data destruction, IT Asset Disposition services, EPR services etc. The e-waste material is procured majorly from IT companies, banks, MNC’s etc. to manage their obligation under the E-waste (Management) Rules, 2022, to safely recover valuable commodities within e-waste for recycling and reuse. Some of such vendors are Samsung, Phillips, Paytm, Jonnes, Phonepe etc.
Risks and concerns
Dependent upon few customers: The substantial portion of its revenues has been dependent upon few customers. Its reliance on a limited number of customers for its business exposes it to risks, that may include, but are not limited to, reductions, delays or cancellation of orders from its significant customers, a failure to negotiate favourable terms with its key customers or the loss of these customers, all of which would have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of the company. In addition, it has not entered into long term agreements with its customers and the success of its business is accordingly significantly dependent on maintaining good relationship with them. The loss of one or more of these significant customers or a reduction in the amount of business it obtains from them could have an adverse effect on its business, results of operations, financial condition and cash flows.
Geographical concentration: It carries its entire recycling operations from its factory unit located at Faridabad, in Haryana. Due to the geographical concentration of its factory unit at Faridabad, its operations are prone to local, regional and environmental factors. Any materially adverse social, political or economic development, civil disruptions, or changes in the policies of the state government or state or local governments, may require a modification of its business strategy, or require it to incur significant capital expenditure or suspend its operations. Any such adverse development affecting continuing operations at its factory unit could result in significant loss due to an inability to meet customer contracts and production schedules, which could materially affect its business reputation within the industry. The occurrence of or its inability to effectively respond to, any such events or effectively manage the competition in the region, could have an adverse effect on its business, results of operations, financial condition, cash flows and future business prospects.
Dependent upon few key suppliers: It collects electrical & electronic waste such as used desktop & laptops, e-waste printed circuit board and other e-waste material to carry out the process of E-waste recycling. Supply of e-waste material is based on the disposal targets of the companies which act as the suppliers to the company. Further, it has entered into purchase agreements with many of its major e-waste suppliers for a period ranging from 2 to 5 years to collect their e-waste and provide them certification of collection of e-waste. These agreements incorporate fixed pricing conditions for e-waste materials, stipulating that it must purchase the materials at predetermined prices irrespective of market fluctuations. In scenarios where market prices for e-waste materials decline below the fixed prices specified in the agreements, the company may incur higher procurement costs than prevailing market rates. This lack of flexibility in pricing arrangements may hinder its agility in responding to market dynamics and could result in missed opportunities to optimize cost efficiencies.
Outlook
Namo eWaste Management is an E Waste collection, disposal and recycling company that offers comprehensive services for recycling of electrical and electronic equipment waste like Air Conditioners, Refrigerator, Laptop, Phones, Washing Machine, Fans etc. It is an ISO 9001:2015, ISO 14001:2015, ISO 27001:2022 & ISO 45001:2018 certified company, complying with strict environmental regulations regarding handling hazardous products and disposing them safely to keep its environment green. It is committed towards managing large volume of electrical and electronic equipment waste and able to extract all of the components of an electrical item including precious and semi-precious metals like Copper, Aluminium, Iron etc. On the concern side, in this competitive industry, it competes with other e-waste management service providers in the world and in India. Supply of e-waste material is crucial for its business operations which are based on the disposal targets of the suppliers. Though, its cost effective and integrated facility provides it with competitive advantage, however, the competition in this industry is likely to further intensify in view of the continuing awareness for environment safety. Furthermore, if one of its competitors or their customers acquires any of its customers or suppliers, it may lose business from the customer or lose a supplier, which may adversely affect its business, results of operations and financial condition.
The company is coming out with a maiden IPO of 60,24,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 80-85 per equity share. The aggregate size of the offer is around Rs 48.19 crore to Rs 51.20 crore based on lower and upper price band respectively. On performance front, total income for the financial year 2023-24 stood at Rs 10107.62 lakh whereas in Financial Year 2022-23 the same stood at Rs 5856.07 lakh representing an increase of 72.60%. The company reported Restated profit after tax for the financial year 2023-24 of Rs 682.90 lakh in comparison to Rs 241.56 lakh in the financial year 2022-23. Meanwhile, its goal is to consistently provide products of the desired quality, which is essential for building trust with its customers, fostering long-lasting relationships, and encouraging brand loyalty. Hence, the company intends to focus on adhering to the quality of its products. Continuous quality review of products and timely corrective measures in case of quality diversion are keys for maintaining quality standards of the products. This is necessary so as to make sure that it maintains the high-quality standards for its offerings and get repeat orders from its customers. This will also aid it in enhancing its brand value and further increase the business. Elevating its quality standards through this strategy sets it apart from its competitors, making it a trusted choice and gaining it more recognition in the market.
