SFC Environmental Technologies Limited

This section provides an overview of the industry context, including references to external industry reports, macroeconomic conditions, and the Indian economy's policy framework. It details global economic trends such as real GDP growth, inflation projections, and manufacturing Purchasing Managers Index (PMI) across various countries. Furthermore, it outlines India's macroeconomic policy, focusing on fiscal consolidation, public investment in strategic sectors, and initiatives aimed at boosting domestic manufacturing and innovation.

The Indian industrial sector showed steady momentum, with the manufacturing sector being the main growth driver, supported by domestic consumption, government capital expenditure, and investments across various industries. The manufacturing PMI consistently indicated expansion, though it moderated towards the end of the period, reflecting softer global demand. Sectoral Gross Value Added (GVA) showed resilient growth, with the construction sector emerging as a fast-growing segment. Furthermore, India continues to be a leading destination for Foreign Direct Investment (FDI), particularly in sectors like manufacturing, infrastructure, and renewable energy.

This section defines various terms and abbreviations used in the Red Herring Prospectus. It specifies that certain terms will have meanings ascribed to them under various legislation, such as the Companies Act, SEBI Act, and SEBI ICDR Regulations. It details definitions for terms related to the company, such as the Issuer, various committees, directors, and financial information. Furthermore, it outlines terms related to the offer procedure, including different types of bidders, bid amounts, and the process for allotment of equity shares.

The document outlines various terms related to an offer, including agreements, bidder types, and various financial and procedural aspects. It details agreements with various parties such as the Registrar, Syndicate Members, and Sponsor Banks. It specifies different types of bidders, including Retail Individual Bidders (RIBs), Qualified Institutional Buyers (QIBs), and Non-Institutional Bidders (NIBs), along with different aspects of the offer structure like the Price Band and the composition of the Offer. It also mentions various accounts and locations related to bid submission and fund transfer.

This section primarily defines various terms used within the document, covering aspects related to investor bidding mechanisms, financial metrics, and various industry-specific concepts. It details requirements for UPI bidders, definitions for financial ratios like Cash Conversion Cycle and various profitability measures, and terms related to environmental and industrial processes.

This section details various conventions regarding the use of financial information, currency, and references within the Red Herring Prospectus. It specifies that financial data is derived from Restated Consolidated Financial Information, and there are noted discrepancies due to rounding. The document clarifies the financial year commencement and end dates, and the reliance of readers on their familiarity with Indian accounting policies. Furthermore, it outlines the use of non-GAAP measures and industry data sources, including disclaimers related to the data providers.

This section discusses forward-looking statements, clarifying that they are not statements of historical fact and are based on management's beliefs, plans, and assumptions. It outlines various risks and uncertainties that could cause actual results to differ materially from those suggested by these statements, including regulatory changes, economic conditions, and market fluctuations. The text cautions investors against placing undue reliance on these forward-looking statements and notes that certain corporate records may have discrepancies.

The offer details specify the structure for the issuance of equity shares, including a fresh issue and an offer for sale. The offer is divided into various portions, including QIB, Non-Institutional, and Retail categories, with specific reservation rules for anchor investors. The document also provides summary financial information from the Restated Consolidated Financial Information for various periods.

This section presents various financial statements and cash flow details for the company over different periods, including quarterly and annual periods. It details comprehensive income figures, earnings per equity share, and a detailed statement of cash flows covering operating, investing, and financing activities. Furthermore, it includes summaries of contingent liabilities and related party transactions.

This section details various financial transactions, including director remuneration, salary payments, professional fees, dividend distributions, and the purchase/sale of goods and services over different reporting periods. It also outlines transactions with related parties, such as reporting entities and various private limited companies. The data is presented across multiple time periods, including June 30, 2026, June 30, 2025, March 31, 2026, March 31, 2025, and March 31, 2024.

This section details various financial transactions and reporting entities across different periods for several companies. It includes data such as purchases of services and materials, sales of goods, corporate guarantee expenses, interest on loans, loan borrowings, loan repayments, and investment activities. The data is presented across different reporting dates, including June 30, 2026, June 30, 2025, March 31, 2026, June 30, 2025, March 31, 2025, and March 31, 2024.

This section details various financial balances and transactions between the reporting entity and related parties, categorized by different reporting entities. It includes information on creditors, investments, employee benefits payable, and various trade balances such as receivables and payables. Furthermore, it outlines transactions eliminated on consolidation and details for corporate guarantees over specified periods.

The section details various financial transactions and disclosures related to corporate guarantees, including payments made to non-executive and Independent directors over specific periods. It also provides tables showing amounts sanctioned and closing balances for term loans and working capital facilities for different entities. Furthermore, the text outlines the structure for handling grievances related to the offer, specifying who can be contacted for different types of issues and detailing the division of responsibilities among the Book Running Lead Managers for various aspects of the offering process.

The section details various coordination and post-offer activities related to the book-building process, including managing anchor investor allocations and final pricing in compliance with SEBI ICDR Regulations. It also outlines post-offer activities such as managing escrow accounts, coordinating with various agencies like the Registrar, SCSBs, and Bankers to the Offer, and handling payments for securities transactions tax. Furthermore, the text discusses the submission of post-offer reports to SEBI and the involvement of legal counsel and statutory auditors.

This section outlines the procedural aspects related to the division of issues and listing, referencing relevant SEBI regulations. It details that the book-building process involves collecting bids based on the Red Herring Prospectus and related forms within a specified price band. The price band and minimum bid lot will be decided by the company in consultation with the Book Running Lead Managers (BRLMs), and if not disclosed, they will be advertised in various newspapers. Bidders, except for Anchor Investors, must participate through the ASBA process, and details regarding the process are provided elsewhere. The offer is also subject to obtaining final approval from the Registrar of Companies (RoC) and final listing and trading approvals from the Stock Exchanges.

The document details the authorized share capital structure, including the breakdown of the capital before and after an offer. It also provides a comprehensive history of equity share allotments and reductions since the company's incorporation, listing various dates, share numbers, face values, and consideration forms. The history includes allotments to numerous shareholders categorized as Promoter and public shareholders, as well as public shareholders.

This section details various allotments and reductions of equity shares, including transactions involving different categories of shareholders. It covers share allotments on a specific date, followed by a subsequent sub-division of equity shares. The data includes details on the number of shares allotted, face value per share, issue price, and the form of consideration. Furthermore, there is a mention of a bonus issue in the ratio of two equity shares for every one held by shareholders as of a specific record date.

This section details various allotments and reductions of equity shares, listing numerous shareholders and the corresponding number of shares involved. The data includes different categories of shareholders and the context for the allotment, such as a Scheme of Amalgamation. The records also mention discrepancies found in corporate filings related to the number of shares allotted and the amount paid by certain entities. Furthermore, the text specifies that the company has not issued equity shares for consideration other than cash or as a bonus issue.

This section details various allotments of equity shares, including a bonus issue on September 5, 2024, based on the holdings of shareholders as of September 4, 2024. The allotments involve numerous entities and individuals, with the total number of equity shares allotted being significant. The allotments include shares to various entities like Aar Em Ventures LLP and Asolkar Tradecraft Private Limited, alongside individual allotments. The data shows a total of 6,22,74,180 shares being accounted for in relation to the bonus issue.

This section details the allotment of equity shares to various shareholders, listing the name of the shareholder, the number of shares allotted, and the corresponding face value for each transaction. The data includes various individuals and entities, such as Dina Damji Gada and Elixir Commercial and Advisory Services LLP, along with the total number of shares allotted to certain groups. The data is presented in a tabular format showing the breakdown of share allotments.

This section details various allotments and transfers of equity shares, including transactions related to a Scheme of Amalgamation. It outlines the shareholding of promoters and the Promoter Group, showing changes over time through various allotments, transfers, and bonus issues. The data covers different dates and transactions, detailing the number of shares allotted, the face value, and the corresponding percentage of total shareholding.

The section details various transactions involving the transfer of equity shares by different parties, including both promoter and non-promoter shareholders. It lists specific transactions such as transfers to various individuals and entities, along with the corresponding percentage changes in the equity share capital. Furthermore, it provides a summary of the build-up of equity shareholding by selling shareholders since the company's incorporation. The section also includes disclosures regarding the pledging of equity shares and the pre-offer and post-offer shareholding of the promoter group and other top 10 shareholders.

The document details the pre-offer and post-offer shareholding percentages for various shareholders, including promoters and other public shareholders. It also outlines various lock-in provisions under SEBI ICDR Regulations concerning promoter contributions and the transferability of equity shares. Specific details are provided regarding the acquisition history of shares by promoters and selling shareholders, along with conditions for pledging equity shares as collateral for loans.

This section details the shareholding pattern of the company as of the date of the Red Herring Prospectus, including various categories of shareholders. It provides a breakdown of the total equity shares held by promoters, public entities, and others, along with various metrics such as voting rights and shares underlying convertible securities. Furthermore, the text discusses the shareholding of directors and key managerial personnel, major shareholders, and the shareholdings of various institutional investors. It also includes disclosures regarding the status of employee stock option plans and restrictions on capital structure changes.

The provided text describes the relationship between the Company and its BRLMs and their affiliates, outlining that these entities may conduct business transactions or provide services to the Company in the ordinary course of business. It also mentions the possibility of future commercial banking and investment banking transactions for which they might receive customary compensation.

The Offer involves a Fresh Issue of Equity Shares and an Offer for Sale of Equity Shares by Selling Shareholders. The Net Proceeds from the Fresh Issue are proposed for various purposes, including debt prepayment, funding working capital requirements, and general corporate purposes. The company also anticipates benefits from the listing of Equity Shares on Stock Exchanges. The proposed deployment of these net proceeds is detailed in a schedule, with specific amounts allocated for the repayment of outstanding borrowings and funding for working capital.

The company requires additional working capital for its incremental needs in Fiscal Year 2027, proposing to utilize ₹74.92 Crore from the Net Proceeds. This funding is intended to cover the working capital requirements for the company's business operations in that fiscal year, with the remaining requirement to be met through internal accruals and borrowings. The projected working capital requirements for Fiscal 2027 were based on future business growth and historical working capital days. The details of the proposed working capital include projections for current assets, current liabilities, and the resulting net working capital requirements.

The document details various assumptions regarding the aging of different financial and current assets and liabilities over fiscal years, based on historical trends. It also outlines the proposed utilization of net proceeds towards general corporate purposes, allowing for flexibility as determined by the Board. The financing for the offer is proposed to come entirely from net proceeds, existing borrowings, and internal accruals, with no firm arrangements required for a significant portion of the funding. Furthermore, the document specifies various procedures and timelines for the offer, including the handling of offer expenses and the monitoring of fund utilization by a designated agency.

The document outlines various factors used to determine the Offer Price, including qualitative strengths and quantitative metrics derived from the Restated Consolidated Financial Information. Key qualitative factors highlighted include market leadership in the wastewater treatment sector, vertical integration through innovation, and a strong position in the solid waste treatment segment. The document also details performance metrics such as revenue from repeat customers and various financial ratios, which are used to assess the company's performance against industry peers.

This section primarily details various financial and operational Key Performance Indicators (KPIs) for the company across different periods and compares them against industry peers. It includes definitions for metrics such as EBITDA Margin, PAT Margin, Return on Equity (ROE), Return on Capital Employed (ROCE), Net Debt/Equity ratio, Fixed Asset Turnover, Cash Conversion Cycle, and Total Order Book. Furthermore, it provides comparative data for these KPIs, including revenue, EBITDA, profit after tax, and various balance sheet and operational metrics, for different fiscal years and recent three-month periods.

The section details the criteria for reporting secondary transactions involving promoters or related parties, specifically concerning sales or acquisitions of shares equal to or more than 5% of the fully diluted paid-up share capital within a rolling 30-day period over 18 months. It also lists various primary and secondary transactions that occurred, including bonus issues and allotments of equity shares. The transactions are itemized with details such as the allotee, type of transaction, number of securities, date, nature of allotment, issue price, and total consideration in ₹ million.

This section details various transactions related to the offer, including both primary and secondary issuances of equity shares. The data includes a list of allotees, the number of securities involved, and the total consideration in ₹ million. Furthermore, it discusses the weighted average cost of acquisition (WACA) for both primary and secondary issuances, and provides context regarding the comparison of these costs with the Floor Price and Cap Price.

This section details the special tax benefits available to the Company, its shareholders, and its Material Subsidiaries under various Indian tax laws. It outlines provisions related to corporate tax rates, deductions, and tax treatment for different types of income and transactions. The benefits discussed are contingent upon the fulfillment of specific conditions prescribed under the relevant tax laws. Furthermore, it specifies tax implications for dividend income, capital gains, and transactions involving non-resident shareholders.

This section details the financial indebtedness of the Company and its Subsidiaries as of July 31, 2026, aggregating to ₹253.10 Crore on a consolidated basis. The data is broken down into borrowings of the Company and its Subsidiaries, including secured and unsecured facilities. The text also outlines various terms related to these borrowings, such as interest rates, tenor, pre-payment penalties, and security requirements, including charges on assets and personal guarantees.

This section outlines the potential consequences of events of default under various borrowing arrangements. These events may lead lenders to take several actions, including declaring outstanding amounts immediately payable, canceling undrawn commitments, enforcing security, appointing directors or observers, or appointing auditors to examine the company's finances. The document emphasizes that this is an indicative list, and other consequences may arise from the non-compliance with financial and other covenants.

Prospective investors should be aware of several risks associated with the investment in Equity Shares, which could negatively impact the company's business, financial condition, and results of operations. Risks include dependence on technology, the potential for technological disruption, and the risk of failure in technology systems. Furthermore, the company is heavily reliant on contracts and projects awarded by government entities, making it vulnerable to changes in government policies or budgetary allocations. There are also risks related to trade restrictions, anti-bribery/anti-corruption compliance, and potential issues with customers and payment delays. Finally, the company has experienced negative cash flows from operating activities in recent periods.

The company has experienced negative net cash flows from operating activities in certain fiscal periods, which are attributed to normal business operations like working capital movements and capital expenditure. The company's revenue has shown growth, but this growth places a strain on financial resources, and there is a risk that increased operating expenses and capital investments could outpace revenue increases, materially affecting results. Furthermore, there are significant concerns regarding the traceability of corporate records and discrepancies, which may expose the company to regulatory actions or penalties. The company is also involved in various legal proceedings, and adverse decisions in these proceedings could lead to liabilities and negatively impact its business and cash flows.

The document outlines several risks related to legal proceedings, including potential actions against promoters and management, and the possibility of adverse outcomes in such proceedings affecting the company's reputation and financial condition. There are also significant working capital requirements, including unsecured loans from subsidiaries that could be recalled, and the need for additional financing to meet operational needs. Furthermore, the company faces risks associated with capital-intensive Special Purpose (SWT) projects, such as reliance on bank financing, regulatory changes like the RBI's Project Finance Directions, and uncertainties regarding the timing and funding of these projects.

The company faces risks related to future debt obligations, including increased interest and repayment burdens, which could negatively impact profitability and cash flows. There is also a risk of being subjected to restrictive covenants in financing agreements, potentially limiting access to operational cash flows. The ability to secure financing under favorable terms in the future is not guaranteed, as it depends on the company's financial condition and cash flow stability in a rising interest rate environment. Furthermore, subsidiaries are involved in material legal proceedings, and adverse outcomes could lead to financial liabilities. Delays in receiving payments from third parties are also a concern, as evidenced by increasing trade receivable days, which points to potential issues with timely collection.

The company faces risks related to the collection of outstanding payments, where there is no guarantee of success in recovery efforts, which could negatively impact its financial condition. There are contingent liabilities, such as customs notices, which, if realized, could adversely affect the company's financial standing. The company relies on a limited number of suppliers for raw materials, exposing it to supply interruptions, price fluctuations, or failure by suppliers to deliver timely materials. Furthermore, there are risks associated with the supply chain, including dependency on foreign suppliers, geopolitical developments, and disruptions in shipping routes, which can affect material availability and costs. Operational risks related to handling hazardous or infectious waste pose significant safety and environmental concerns, with potential for accidents, leaks, and resulting liabilities. Finally, the company's ability to secure contracts for Solid Waste Treatment (SWT) projects is subject to competitive bidding, potential rejection of bids, and limitations on contract terms imposed by government agencies.

The company faces several risks related to contractual obligations, including unilateral termination rights and liability for defects arising after contract termination. There is also a risk of litigation from unsuccessful bidders, which could cause delays in project awards and impact financial performance by requiring the retention of unallocated resources. Furthermore, there is a risk of under-utilization of manufacturing and waste treatment capacities, which could negatively affect business prospects and financial performance. Operating risks exist for existing manufacturing plants, such as equipment breakdown, power supply issues, labor disputes, and natural disasters, alongside the need to comply with regulatory requirements. The company also faces risks related to its order book, where modifications or cancellations could impact revenues, and risks associated with indebtedness and restrictive covenants under financing agreements.

The company has faced past delays in paying statutory dues, which were attributed to issues with receiving documents from third-party vendors or delays in tax liability verification. While internal reviews address short payments promptly, there is no guarantee that such delays will not occur in the future, which could materially impact financial results. Furthermore, there are concerns regarding potential conflicts of interest arising from directors and promoters entering into similar or competing businesses. The company also faces risks related to future regulatory changes, such as new waste management rules, which could necessitate significant cost increases and operational modifications. Finally, the operational success is dependent on key managerial personnel and the reliability of utility supplies.

The company faces several risks related to operational continuity, primarily concerning power supply interruptions which could halt manufacturing, potentially impacting production volumes and cash flows. There are significant risks associated with strategic acquisitions, including the possibility that these investments may not meet expectations or that integration difficulties could prevent the realization of anticipated benefits. Furthermore, the launch of a new business segment, wastewater recycling & reuse (WRR), carries risks related to market penetration and achieving expected sales volumes. The company's revenue stream from the SWT business is heavily dependent on government contracts, making it vulnerable to changes in government priorities or budgetary allocations. Finally, there are risks associated with contractual obligations, including potential non-compliance with customer specifications, and risks related to the longevity and renewal of leases.

The document details several risks related to financial reporting, operational execution, and market conditions. Risks include potential issues with the audit trail functionality in accounting software, uncertainty regarding future capital requirements and financing availability, exposure to cost variations in contracts, dependence on R&D for future success, and vulnerability to macroeconomic factors. Furthermore, the company faces risks from labor relations, potential litigation, and seasonal fluctuations in its revenue due to the nature of its business.

The company faces several risks related to legal compliance, operational continuity, and intellectual property protection. Risks include potential damage to reputation from legal actions, the possibility of failing to obtain or renew necessary statutory and regulatory licenses, and the potential for third-party claims regarding intellectual property infringement. Furthermore, there are concerns about the adequacy of insurance coverage against various losses, and significant risks associated with the failure or breach of IT systems and cybersecurity. Finally, the company acknowledges that its proprietary technical knowledge may not be adequately protected, which could erode its competitive advantage.

The company faces risks related to the unauthorized use or disclosure of confidential information, which could negatively impact business results. There is exposure to foreign exchange rate fluctuations due to international transactions, which are partially hedged but still carry risk. The company's ability to access capital is dependent on credit ratings, and a downgrade could restrict access to funding. Furthermore, reliance on contract labor introduces risks related to wage payments and potential regulatory requirements. The company is exposed to various safety, security, and crisis risks, including natural disasters, terrorism, and civil unrest, which could damage operations and reputation. Finally, there are uncertainties regarding the utilization of funds raised in a fresh issue and the potential for delays or cost overruns in implementing planned projects.

The company's business is exposed to various risks stemming from external economic and political factors, including contagious disease outbreaks, fluctuations in the Indian economy, and changes in government policies. These risks can negatively impact business operations, cash flows, and the trading price of the equity shares. Furthermore, the company faces potential issues related to competition law, evolving regulatory frameworks, and restrictions on foreign investment. Investors should also be aware of the differences in accounting standards and the potential for market volatility upon listing.

This section outlines various risks related to legal and regulatory changes, market conduct, and financial fluctuations. Risks include uncertainties regarding the impact of recent and proposed laws, potential issues with tax implications for cross-border transactions, and restrictions on investor rights such as pre-emptive rights. Furthermore, the document highlights risks associated with future equity issuances, fluctuations in currency exchange rates, and potential delays in the listing and trading of equity shares.

The section outlines the criteria for identifying material litigation, including thresholds based on turnover, net worth, and profit or loss, which were determined to be ₹7.61 Crore. It further clarifies that there are no outstanding criminal proceedings, statutory or regulatory actions, or direct and indirect tax claims against the Company. The text details various pending litigation involving subsidiaries, including legal notices, FIRs, and various show cause notices from pollution control boards, as well as disputes with a creditor and former managing directors. It also confirms the absence of such proceedings involving directors or promoters.

The section details various aspects of litigation, disciplinary actions, and regulatory approvals related to the company and its subsidiaries. It states that no other pending proceedings involving the Promoters were considered material by the Company. Furthermore, there have been no disciplinary actions or penalties taken against the Promoters by SEBI or stock exchanges in the five fiscal years preceding the prospectus date. The text also outlines significant outstanding dues to creditors, including amounts owed to Micro, Small and Medium Enterprises, material creditors, and other creditors. Finally, it lists numerous consents, licenses, registrations, and permits obtained by the Company and its material subsidiaries from various governmental, statutory, and regulatory authorities.

This section details various registrations and approvals related to the Company, including tax registrations, professional tax certificates, business and environment approvals, and labour/employment related approvals. It further states that there are no material approvals pending, expired, or required for the Company or its material subsidiaries as of the date of the Red Herring Prospectus. Finally, it lists existing registered trademarks and pending trademark registration applications.

The document details various authorizations related to the offer, including resolutions from the Board and Shareholders, and the approval of the Draft and Abridged Red Herring Prospectuses. The company has received in-principle listing approvals from the BSE and NSE. Furthermore, the document confirms that the company and its related parties have not been prohibited from accessing capital markets and have complied with certain rules, including those related to Significant Beneficial Owners. It also outlines various disclaimers regarding the filing and the responsibility of the parties involved.

The document outlines various disclaimers and permissions granted by stock exchanges, including BSE and NSE, for the use of the company's name in the offer document. It details specific permissions received from BSE and NSE, which were scrutinized for internal purposes, and clarifies that these permissions do not imply approval of the offer document's contents or the securities' listing. Furthermore, the text specifies that the proposed equity shares are intended to be listed on both BSE and NSE, with NSE designated as the exchange for finalizing the Basis of Allotment. It also sets out strict timelines and procedures for the completion of listing formalities.