SFC Environmental Technologies
IPO Size: Rs. 668 cr
- Fresh Issue of Rs. 150 cr (5% dilution) for (i) repaying Rs. 42 cr of Rs.150 cr gross debt, outstanding as of 31.7.26 (ii) working capital Rs. 75 cr
- Offer for Sale (OFS) of Rs. 518 cr, 30% OFS by promoter (48% to shrink to 41%) and 70% by 7 individual investors (24% combined stake to drop to 11% post IPO)
Price band: Rs. 313-330 per share
M cap: Rs. 3,233 cr (IPO represents 21% of m cap)
IPO Date: Tue 27th Oct to Thu 29th Oct 2026, Listing Tue 3rd Nov 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Water Treatment Company
SFC Environmental Technologies is a 21-year-old Navi Mumbai headquartered company providing technology for wastewater treatment, wastewater recycling and solid waste treatment. EPC companies are SFC’s customers, with more than half of annual revenue generated in Q4 alone. It has an outstanding order book of Rs. 1,657 cr, representing 1.9x of trailing twelve month revenue.
Financial Track Record
Company’s financial growth has been sporadic. PAT has growth at only 5% CAGR between FY24 to FY26, although it showed 50% YoY jump in FY24.
FY26 revenue grew 15% YoY to Rs. 804 cr, with EBITDA up 14% YoY to Rs. 237 cr, translating into an EBITDA margin of 29%. But PAT growth was only 5% YoY to Rs. 160 cr. Nevertheless, net margin was healthy at 20% with FY26 EPS of Rs. 16.5.
As execution is largely concentrated towards end of the fiscal, Q1FY27 revenue was only Rs. 134 cr with PAT of mere Rs. 1.5 cr, resulting in an EPS of 16 paise.
Total debt, rated A+ by CARE, stands at Rs. 150 cr currently, down from Rs. 196 cr as of 31.3.26.
Working Capital Heay Business
Company’s working capital management has been deteriorating, with working capital gradually inching up to 163 days currently, from 80 days about 3 years ago. Thus, company’s working capital requirement of Rs. 114 cr as of 31.3.23 has more than tripled to Rs. 364 cr, as of 31.3.26, and continues to remain at those levels, even as of 30.6.26.
This has led to RoE contraction from 31% in FY24 to 22% in FY26. Post listing, RoE may further compress to mid-teens over the next couple of years.
