Solid waste management likely to become a Rs 9,800-cr industry in five years, says Jose Jacob Kallarakal, chairman and MD, Antony Waste Handling Cell

By Urvashi Valecha

The Indian solid waste management industry is expected to reach Rs 9,800 crore in the next five years, said Jose Jacob Kallarakal, chairman and managing director, Antony Waste Handling Cell. In an interview with Urvashi Valecha, he explains why has the company decided to hit the markets at this juncture. Excepts:

After keeping the IPO on hold since March, why is it that you’ve decided to hit the markets at this juncture?

When we had planned to launch the public issue in March, a couple of factors went completely against it. No one could have factored in the speed with which novel Coronavirus started impacting the global markets. In addition to that, while we had expected SBI Cards to drain liquidity from the system, we believed that being a smaller issue, we will not face any major challenge. However, the challenge got compounded when the RBI imposed a moratorium on Yes Bank. We decided to extend the issue hoping for the sentiment to improve, but looking at the mood of the markets, we withdrew the IPO. We now believe that the sector has recovered faster than the general economy and our recent results are a testimony to the same. We decided to re-file the DRHP once we believed that the business has stabilised to an extent and started meeting investors almost immediately after receiving observations from Sebi.

What is your outlook for the waste management industry?

According to market analysts, the Indian solid waste management sector is estimated to be around Rs 5,000 crore in FY20. In the next five years, it will be close to Rs 9,800 crore. Moreover, close to 77% of municipal solid waste is disposed in open dumps, and when this practice of disposing of waste in open dumps reduces, organised companies in the sector will benefit.

How has your business fared in the last nine months and how has the pandemic impacted it?

The company basically does collection, transportation and processing of waste. We do only municipal solid waste that is generated in the municipal corporation areas and residential areas. While being an essential service waste management companies were permitted to work for most part of the lockdowns, there was some impact on the industry at the beginning of the lockdowns. The situation has improved subsequently and MSW tonnage is expected to normalise to pre-Covid-19 levels by end of 2020 as commercial and industrial establishments open up.

How are you addressing investors who are concerned over sustainability and environmental (ESG) impact?

We have an ESG policy that identifies focus material areas that relate to the impact of our business activities on the environment and the society while ensuring a proper governance. A few areas that we try to focus on include gaseous emissions and air pollution, potential contamination of ground and surface water resources, factors contributing to and impacting climate change, health and safety of employees, contract workers and communities, no exploitation of child labour, prevention of sexual harassment and stakeholders’ grievances redressal mechanism.

How will the proceeds from the IPO be utilised?

The issue is of around Rs 300 crore, including an offer for sale of around Rs 215 crore by existing investors who stayed invested in the company for over 12 years. The primary issuance is of Rs 85 crore. Of that, Rs 40 crore goes to the unit we are setting up in Pimpri Chinchwad while Rs 38.5 crore will be used for reducing debt at a consolidated level.