Antony Waste Handling Cell Ltd.

IPO Size

`300 Cr

Price Band

`313-315 Per Share

Minimum Lot Size

47 Share

Face Value

`5 Per Share

Employee Discount

NA

Retail Allocation

35%

Issue Open Date

21 Dec, 20

Issue Close Date

23 Dec 20

Listing Date

01 Jan 21

About the Company:

Having an established track record of 19 years, Antony Waste Handling Limited is one of the five top players in MSW management industry. The Antony Waste Handling comes at second position after Ramky Enviro in terms of business. The company claims to be out of three companies in India which caterr collection & transportation, treatment & disposal and landfills in municipal solid waste management (MSW). The company undertakes:

  1. MSWC&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.
  2. 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
  3. 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 our Subsidiaries.

Outstanding Litigation:

S.No. 1 - Company 2 - Directors 3 - Promoters
Entity Name By the Company Against the Company By the Director Against the Director By the Promoter Against the Promoter
Criminal cases - 13 - - - -
Material civil cases - 924.22 - - - -
Taxation matters - - - - - -
Regulatory Procedings - - - - - -
Amt. (In Million Rs.) - 937.22 - - - -

Financial Statements:

Income Statement FY20 FY19 FY18
Gross Operating Income 4646.11 2985.18 2907.78
Cost of Employee & Inventory 1539.01 981.01 1002.08
Other Expenses 1710.5 1094.12 1061.82
EBITDA 1396.6 910.05 843.88
Depreciation 242.43 183.31 127.08
Interest  302.44 249.94 228.93
Profit Before Tax 851.73 476.8 487.87
Exceptional Items 32.17 - -
 Tax 198.8 129.98 89.03
Profit After Tax 620.76 346.82 398.84

Recommendation

As per CA Ajay Chouhan, SEBI Registered Research Analyst, recommendation is to ‘Subscribe’. The company is likely to enjoy healthy premium due to monopoly structure. The company has doubled their Profit after Tax and revenue from direct operations this year. The company doesn’t enjoy debt-free status and have a long-term borrowing of Rs. 145.12 crores. Antony Waste Handling Ltd. is demanding a P/E multiple of 11.46x and due to unavailability of similar listed peer it is difficult to gauge right pricing while the waste management industry in USA is trading at an Industry P/E multiple of 28.22, which makes it a cheaper bet offered by the management. The waste management industry is expected to grow by 7% annually due to soaring urbanization, which is why we recommend it to ‘Subscribe’ for long term.

Promoter of the Company

The promoters of the company are Jose Jacob Kallarakal, Shiju Jacob Kallarakal, and Shiju Antony Kallarakkal.

Peer Comparison

The inculcation of clean environment vision in the ongoing policies of the Indian administration seems lucrative for waste management companies. Considering the global overview, the total waste generation levels have been increased to 30.9 billion tons from 28.5 billion tons in FY2017. On the domestic front, the efficiency in waste management is much poor in comparison with western countries. However, the waste management companies are improving their learning curve and rising culture of industrial production in India is expected to put waste management companies in a sweet spot. The major factors which will keep generating revenues for waste management companies are changing patterns of people towards shift from open dumping, electric vehicle manufacturing, digital transformation of bins. China’s ban on import of foreign waste will also bring new business on table for Indian waste management companies. There is no listed peer of Antony Waste Handling Ltd. while in the unlisted space, the company will face competition from Ramky Enviro, Jindal Urban Infrastructure, Solapur Bio-Energy Systems and Elephant Energy.

Objectives of the Issue

Offer for Sale

Offer for Sale: The object of the Offer for Sale is to allow the shareholders to sell an aggregate of up to 6,824,933 Equity Shares held by them. The company will not receive any proceeds from the Offer for Sale. Offer for Sale Size is of 6,824,933 Equity Shares of ₹5 aggregating up to ₹215 Cr at an upper price band.

Fresh Issue

Fresh Issue: The company has planned to raise fresh capital comprising an aggregate of 2,698,412 shares having ₹5 aggregating up to Rs. 85 Cr at the upper price band of Rs. 315. An amount of Rs. 40 cr. from net proceeds will be utilized for financing PCMC WTE Project through investment in their Subsidiaries; AG Enviro and ALESPL. The company is looking to reduce their consolidated borrowings amounting Rs. 35 cr. by infusing debt in their Subsidiary -AG Enviro. Residual will be utilized for general corporate purposes.