1
Please refer to important disclosures at the end of this report
1
1
Leading Player in Municipal Solid Waste.
Incorporated in 2001, Antony Waste Handling Cell Limited (AWHCL) is engaged in
offering Municipal Solid Waste (MSW) management services. Company are one of
the top five players in the Indian MSW management industry with an established
track record of more than 19 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. Company is among
the select few players who have pioneered in both MSW collection and
transportation sector. It has in-house expertise in landfill construction and
management sector.
Positives: (a) Presence in the fast-growing MSW management industry with end-to-
end capabilities (b) Strong track record of project execution (c) Long term contracts
with municipalities (d) Experienced promoters and management team with strong
domain expertise.
Investment concerns: (a) Business is dependent on municipal authorities for a
substantial proportion of the revenue (b) This business involves receivables risk
from municipalities, which can lead to financial instability for the company. This
also restricts further investment in asset development (c) Business dependent on a
limited number of customers for a significant portion of the revenue.
Outlook & Valuation: For Antony to grow its business it needs to win new contracts
from municipalities. The top 5 clients contributed 81.8% of the revenue of the Fiscal
year 2020. So in the future if a company is not able to win an existing major
contract again, it will impact the financials adversely. Further, the business involves
receivables risk from municipalities, which restricts the future growth opportunities.
Financial conditions may be adversely affected if new municipal solid waste
projects are not awarded to the company. So considering the valuation of P/E of
11.5x on FY20 basis (at the upper price band), we recommend “NEUTRAL” rating
on the issue.
Y/E March (` cr)
FY18
FY19
FY20
Net Sales
276.1
283.6
450.5
% chg
-
2.7
58.9
Net Profit
39.9
34.7
62.1
% chg
-
-13.1
79.0
EBITDA (%)
25.3
26.8
27.8
EPS (Rs)
22.5
20.4
27.5
P/E (on FDEPS)
23.4
25.3
11.5
ROE (%)
24.5
18.2
20.1
RoCE (%)
30.1
26.5
30.2
EV/EBITDA
12.7
12.1
7.5
EV/Sales
3.2
3.2
2.1
Neutral
Issue Open: December 21, 2020
Issue Close: December 23, 2020
Offer for Sale: 0.68 cr share
QIBs 50% of issue
Non-Institutional 15% of issue
Retail 35% of issue
Promoters 46.2%
Others 53.8%
Fresh issue: Rs85 cr
Face Value: Rs.5
Present Eq. Paid up Capital: Rs12.8 cr
Post Issue Shareholding Pattern
Post Eq. Paid up Capital: Rs14.1 cr
Issue size (amount): Rs300 cr
Price Band: Rs313-315
Lot Size: 47 shares and in multiple thereafter
Post-issue implied mkt. cap: * Rs886cr - **Rs891cr
Promoters holding Pre-Issue: 51.1%
Promoters holding Post-Issue: 46.2%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Keshav Lahoti
+022 39357600, Extn: 6363
keshav.lahoti@angelbroking.com
Antony Waste Handling Cell Ltd
f
IPO Note | Waste Handling
December 19, 2020
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Antony Waste Handling Cell Ltd | IPO Note
December 19, 2020
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Company background
Incorporated in 2001, Antony Waste Handling Cell Limited is engaged in offering
Municipal Solid Waste (MSW) management services. The service range of the
company includes solid waste collection, transportation, processing and disposal
services to Indian municipalities. It has in-house expertise in landfill construction
and management sector.
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.
The company is a part of Antony group, which has a diversified business model
including ancillary and automotive body-building industries. Antony Waste
Handling Cell Ltd has completed 25 projects for municipalities and private players
till November 30, 2018. The company mainly takes MSW processing projects,
MSW C&T projects, and mechanized sweeping projects.
Some of the major clients of the company are Municipal Corporation of Delhi
(MCD), Jaypee International Sports, and Kalyan Dombivali Municipal Corporation
(KDMC).
Issue details
No of shares
(Pre-issue)
%
(Post-issue)
%
Promoter
13,075,780
51.1
13,075,780
46.2
Public
12,512,978
48.9
15,211,391
53.8
Total
25,588,758
100.0
28,287,171
100.0
Objectives of the Offer
Part-financing for PCMC WTE Project through investment in the
subsidiaries of the Company, AG Enviro and/or ALESPL
Reduction of consolidated borrowings by infusing debt in the subsidiary -
AG Enviro (for repayment / prepayment of portion of their outstanding
indebtedness)
General corporate purposes, subject to the applicable laws.
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Y/E March (` cr)
FY18
FY19
FY20
H1FY21
Total operating income
276.1
283.6
450.5
207.3
% chg
-
2.7
58.9
Total Expenditure
206.4
207.5
325.1
155.3
Traded goods consumed
2.9
3.7
1.1
0.1
Project Expense
33.4
28
38
10.4
Employee benefit expense
64.0
66.3
114.9
73.6
Other Expenses
106.1
109.5
171.1
71.2
EBITDA
69.7
76.1
125.4
52.0
% chg
-
9.2
64.7
(% of Net Sales)
25.3
26.8
27.8
25.1
Depreciation& Amortisation
12.7
18.3
24.2
15.5
EBIT
57.0
57.8
101.2
36.5
% chg
-
1.4
75.0
(% of Net Sales)
20.7
20.4
22.5
17.6
Interest & other Charges
22.8
25.0
30.2
14.1
Other Income
14.6
14.8
14.1
7.7
(% of Sales)
5.3
5.2
3.1
3.7
Recurring PBT
48.8
47.6
85.1
30.1
% chg
-
-2.4
78.6
Exceptional item
-
-
-3.2
-
Tax
8.9
13.0
19.8
1.0
PAT (reported)
39.9
34.7
62.1
29.1
% chg
-
-13.1
79.0
(% of Net Sales)
14.5
12.2
13.8
14.0
PAT attributable to:
Owners
29.4
27.4
42.3
19.7
Minority interest
10.5
7.3
19.8
9.4
Basic & Fully Diluted EPS (Rs)
13.5
12.5
27.5
7.7
% chg
-
-7.4
120.5
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Y/E March (` cr)
FY18
FY19
FY20
H1FY21
SOURCES OF FUNDS
Equity Share Capital
1.3
7.2
12.8
12.8
Other equity
118.8
143.2
197.7
217.2
Shareholders Funds
120.1
150.4
210.5
230.0
Non controlling interest
49.1
56.3
76.1
85.5
Total Loans
111.3
136.2
175.6
162.4
Other liabities
31.7
44.1
59.9
65.2
Total Liabilities
312.2
387.0
522.1
543.1
APPLICATION OF FUNDS
Property, plant and equipment
40.0
57.6
137.9
128.1
Right-of-use Assets
1.5
3.0
2.3
2.0
Capital work-in-progress
-
15.1
0.6
2.1
Intangible assets
-
105.0
118.7
117.9
Intangible assets under development
105.6
8.2
13.9
13.8
Investment in joint venture
-
-
-
-
Trade receivable
28.4
33.0
27.2
30.8
Current Assets
113.4
111.7
209.7
241.2
Inventories
0.1
0.1
0.1
0.1
Sundry Debtors
44.3
55.7
85.8
79.3
Cash & Bank Balance
33.7
22.0
35.5
62.9
Other Assets
35.4
33.9
88.3
99.0
Current liabilities
115.9
125.7
150.0
164.4
Net Current Assets
-2.5
-14.0
59.7
76.8
Other Non Current Asset
139.2
179.0
161.8
171.6
Total Assets
312.2
387.0
522.1
543.1
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Y/E March (` cr)
FY18
FY19
FY20
H1FY21
Loss before tax
48.8
47.7
82.0
29.9
Depreciation
12.7
18.4
24.2
15.5
Change in Working Capital
(29.8)
(37.6)
(19.5)
(10.5)
Interest Expense
18.4
19.3
23.9
11.0
Direct Tax Paid
(8.5)
(14.1)
(20.9)
(7.1)
Others
(5.5)
(2.9)
6.0
(1.9)
Cash Flow from Operations
36.1
30.7
95.8
37.1
(Inc.)/ Dec. in Fixed Assets
4.1
(62.2)
(107.4)
(4.5)
Changes in investment
(1.3)
(4.5)
(10.2)
(6.3)
Interest income received
11.3
13.0
13.9
7.6
Cash Flow from Investing
14.1
(53.7)
(103.7)
(3.2)
Changes in Borrowings
(10.1)
33.9
42.5
(0.5)
Interest paid
(16.2)
(16.5)
(21.1)
(11.4)
Dividend on preference share
(3.1)
(5.6)
-
-
Others
(0.1)
(0.8)
(7.5)
(0.5)
Cash Flow from Financing
(29.5)
11.1
13.9
(12.4)
Inc./(Dec.) in Cash
20.7
(11.9)
5.9
21.5
Opening Cash balances
10.9
31.5
19.6
25.5
Closing Cash balances
31.5
19.6
25.5
47.0
Y/E March
FY18
FY19
FY20
Valuation Ratio (x)
P/E (on FDEPS)
23.4
25.3
11.5
EV/Sales
3.2
3.2
2.1
EV/EBITDA
12.7
12.1
7.5
Per Share Data (Rs)
EPS (Basic)
22.5
20.4
27.5
EPS (fully diluted)
13.5
12.5
27.5
Returns (%)
Angel ROIC (Pre tax)
49.4
25.6
30.4
ROE
24.5
18.2
20.1
ROCE
30.1
26.5
30.2
Turnover ratios (x)
Receivables (days)
58.5
71.7
69.5
Inventory (days)
0.1
0.1
0.1
Payables (days)
41.8
46.6
43.8
Working capital cycle (days)
16.8
25.2
25.8
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Research Team Tel: 022 - 39357800 E-mail: research@angelbroking.com Website: www.angelbroking.com
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