GEM Enviro Management IPO (SME) Overview

GEM Enviro Management Limited is a waste management company specialising in recycling all packaging waste, including plastic waste. GEM Enviro IPO plans to raise Rs 44.93 crores. The issue is a combination of fresh issue of 14.98 lakh shares aggregating to Rs 11.23 crores and offer for sale of 44.93 lakh shares aggregating to Rs 33.70 crores.

IPO opensJune 19, 2024
IPO ClosesJune 21 2024
IPO Size (Rs.)₹ 44.93 cr
IPO Size (shares)5,990,400 shares
BreakupFresh issue 33.70 Cr+ OFS ₹11.23 Cr
Face Value:₹ 5
IPO Price in Rs :₹71 to ₹75 per share
Minimum Lot1600 Shares
Listing AtBSE SME
QIB ~50 %
NII Quota~15%
Retail Quota~35%
 Lead Manager Share India Capital Services Private Limited 
Fintellectual Corporate Advisors Private Limited 
RegistrarSkyline
Market makerShare India Securities.

About GEM Enviro Management :

  • GEM Enviro Management Limited is a waste management company specialising in recycling all packaging waste, including plastic waste
  • Their range of services include EPR (Extended Producer Responsibility) Fulfillment for all kinds of dry waste (Plastic, E-Waste, Battery, Tyre), ESG (Environment, Social and Governance) Consulting & BRSR (Business Responsibility and Sustainability Reporting) Reporting and Project Advisory & Management for Plastic Credits.
  • Company provides following Services:
    • EPR ( Extended Producer Responsibility) consultancy and fulfilment for Plastic Waste
    • Collection and recycling of Industrial Plastic Waste
    • Sales and Marketing of recycled products
    • ESG Consulting and BRSR (Business Responsibility and Sustainability Reporting)
  • Promoters of GEM Enviro are Mr. Sachin Sharma, Mrs. Sangeeta Pareekh, Mr. Dinesh Pareekh, Mr. Sarthak Agarwal and Blp Equity Research Private Limited.
  • They employed 51 personnel across their operations.

Financials: GEM Enviro Management IPO

Particulars/ Rs Lacs9m Dec 20232022-232021-222020-21
Revenue from operations2,620.944,253.023,280.002,551.42
Profit After Tax840.421,001.82745.23583.38
Share Capital1,052.6430.963636
Net worth3,103.322,411.511,713.571,015.14
Earnings Per Share3.994.753.532.76
NAV14.7411.458.144.82
Total Borrowings0022
Post issue Share Capital1127.5   
FV5.0   
IPO price75.0   
EPS Fy234.4   
PE Fy2316.9   
EPS Fy24 (annualized)5.0   
PE Fy24  (annualized)15.1   
Market cap in Lacs16,913   
Market cap / Sales3.98   

Anchors: GEM Enviro Management IPO

GEM Enviro Management IPO: Salient Points

  • The India Plastic Recycling market stood at approximately 5700 thousand tonnes in FY 2023 and is likely to grow at a steady CAGR of 5.84% in the forecast period by FY 2030.
  • Details of revenue from each product/ services
  Product/ Service NameFor period ending 31.12.2023FY 2022-23FY 2021-22FY 2020-21
EPR consultancy and fulfilment for Plastic Waste2,535.593,504.742,939.602,067.47
Collection and recycling of Industrial Plastic Waste81.14729.08319.60475.93
Sales and Marketing of recycled products    
Backpack0.02
Shorts0.02
Scrap Laminates0.61
Scrap Aluminium Can3.102.52
Cap2.080.500.660.00
T-shirts2.136.957.854.84
Bags4.60
Paper Scrap11.760.58
Cataract Pouch0.02
Neck Pillow0.01
Aluminium Waste3.93
Goggles0.03
Clock0.01
Total Revenue from Operations2,620.944,253.023,280.002,551.42
  • Over a period of time, the company was moved from just collection and recycling of various types of packaging waste to include implementing Plastic Extended Producer Responsibility Programs for different organizations, which has now become its main business vertical.
  • KEY FINANCIAL AND OPERATIONAL PERFORMANCE INDICATORS (“KPIS”)
Particulars(Amount in ₹ lakhs)9m 2023202320222021
Revenue from operations2,620.944,253.023,280.002,551.42
Growth      in      Revenue  29.67%  28.56% 
EBITDA1,120.291,327.51992.01799.86
EBITDA (%) Margin42.74%31.21%30.24%31.35%
EBITDA Growth   33.82%  24.02% 
ROCE (%)36.55%55.98%58.15%76.58%
Current Ratio4.422.992.722.06
Operating Cash flow272.53845.73345.1822.77
PAT 840.421,001.82745.23583.38
ROE/ RONW30.48%48.57%54.62%83.23%
  • GEM has pan Indian presence with vast network of waste collectors and recyclers. Till date it has prevented >1 Million MT/Year of recyclable plastic waste and >100,000 MT of MLP (Multi Layered Plastic) waste.
  • The company uses third party transport services for the transportation of plastic waste from the collection centres to the recyclers
  • They a diverse set of over 100 clients which include leading multinational and Indian companies such as Coca Cola, SC Johnson, , Varun Beverages, NFL, IFFCO, Mamaearth, Himalaya, Herbalife, Orient Electric among others.
  • GEM Enviro Management IPO is coming at a PE ratio of 16.9x (FY23 Earnings) and 15.1x (fy24 annualized earnings).
  • I intend to apply in GEM Enviro Management IPO subject to availability of funds. There is positive outlook for the recycled plastic waste management market in India due to environmental concerns and Govt. regulations.
  • GMP as reported on social media has been Rs. 71 (95%).
  • Share India Capital Services Private Limited , the Ist lead manager, has a good record as a Lead Manager. They have handled IPOs of AVP Infracon Limited,AVP Infracon Limited IPO Pune E-Stock Broking, Wise Travel India Limited, New Swan Multitech Limitd, Krishca Strapping Solutions Limited, De Neers Tools Limited, Quicktouch Technologies, A G Universal Limited, Exhicon Events Media Solutions Limited, Maiden Forgings Limited, Humming Bird Education Limited, Anmol India Limited.
  • This is the ist +issue being handled by the 2nd lead manager. .
  • SME IPOs are quite volatile and new retail investors need to exercise considerable caution in my view.
  • This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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