SFC Environmental Technologies Limited IPO

01At a glance

SFC Environmental IPO date, price band and lot size

• Price band: ₹313 to ₹330 a share, from NSE's issue page; the prospectus leaves the price blank (RHP p.3).
• Lot size: 45 shares, from NSE's issue page; one lot costs ₹14,850 at the upper band (our arithmetic).
• Dates: anchor bidding on Monday, October 26, 2026; the issue opens on Tuesday, October 27, 2026 and closes on Thursday, October 29, 2026 (RHP p.3).
• Size: a fresh issue of up to ₹150.0 crore and an offer for sale of up to 15,682,750 shares of ₹2 face value (RHP p.3). At the upper band the offer for sale is worth ₹517.5 crore and the whole issue ₹667.5 crore (our arithmetic, RHP p.3).
• Who gets the shares: not more than 50% for qualified institutional buyers, not less than 15% for non-institutional investors and not less than 35% for retail investors, under Regulation 6(1) (RHP p.3).
• Lead managers and registrar: IIFL Capital Services Limited, JM Financial Limited and Nuvama Wealth Management Limited; MUFG Intime India Private Limited is the registrar (RHP p.3). NSE is the designated stock exchange (RHP p.3).

What the company does: designs, supplies and supervises the installation of equipment for sewage and effluent treatment, built around its own C-Tech sequencing batch reactor process, and builds and runs solid-waste treatment and biogas plants (RHP p.299, RHP p.300).

Who pays it: EPC contractors and public bodies building sewage and waste plants. Named top-ten customers include Goa Waste Management Corporation, GVPR Engineers Limited and Vishvaraj Environment Limited; the top ten were 64.44% of FY26 revenue (RHP p.31).

Why it is raising money: ₹74.9 crore for working capital and ₹42.2 crore to prepay loans of the company and its subsidiary Vasudha Waste Treatment Private Limited, with the rest for general corporate purposes (RHP p.169).

How fast it has grown: revenue from ₹657.5 crore in FY24 to ₹803.6 crore in FY26, and profit after tax from ₹144.2 crore to ₹160.2 crore (RHP p.94). That is about 10.6% and 5.4% a year (our arithmetic, RHP p.94).

The one thing to understand: profit has not turned into cash. Operating cash flow was negative in FY24 and FY26, ₹(11.7) crore and ₹(25.8) crore, while profit after tax was ₹144.2 crore and ₹160.2 crore (RHP p.96, RHP p.94). Most of the year's sales are booked in the last quarter and paid for late: trade receivable days rose from 197 to 282 (RHP p.41).

02The business, in plain words

What SFC Environmental does

SFC Environmental Technologies was incorporated in Mumbai on March 29, 2005 as a private company and became a public company with a fresh certificate dated August 13, 2024 (RHP p.3).

A city awards a sewage plant contract → the EPC contractor picks SFC's C-Tech process and orders its package → SFC designs the process, supplies decanters, diffusers, blowers, filters and control panels, and supervises commissioning → SFC is paid under the supply contract, and later for operation and maintenance.

• Wastewater treatment (WWT): C-Tech, the company's sequencing batch reactor process, is used in 728 installations commissioned up to July 31, 2026, treating 17,511.11 million litres a day, according to the commissioned F&S report (RHP p.299). The report credits the company with over 80% share of SBR technology in India (RHP p.299).
• Recycling and reuse (WRR): a new tertiary-treatment business using ultrafiltration, reverse osmosis and membrane bioreactor parts that the company distributes exclusively in the municipal market under an agreement with DSP Singapore Holdings Pte Ltd, a DuPont entity (RHP p.299). The first order came in July 2025 (RHP p.310).
• Solid-waste treatment (SWT): integrated plants that turn municipal waste into biogas, electricity, compost and recyclables, such as the plant at Saligao, North Goa, run for over ten years (RHP p.300). Through subsidiary Hindustan Waste Treatment Private Limited it won two compressed biogas plant orders from a government-owned oil company, in Assam and Odisha, worth ₹501.7 crore together (RHP p.300).
• Automation: subsidiary Chavare Engineering Private Limited makes control panels and automation systems (RHP p.310).

Earnings equation: Revenue ≈ sewage plants supplied × value of the C-Tech package + waste and biogas contracts + operation and maintenance. The F&S report puts the C-Tech package at about 10 to 15% of the cost of a sewage plant (RHP p.231).

03Where the money comes from

Source: RHP p.310. Other operating revenue includes the automation subsidiary Chavare Engineering (RHP p.310).

• Revenue from outside India was ₹37.4 crore in FY26 (RHP p.535).
• Revenue from repeat customers was 91.98% of FY26 revenue (RHP p.184).

SFC Environmental customers: how concentrated the revenue is

Source: RHP p.31, RHP p.307.

The top ten change each year with the contracts executed (RHP p.31). Of their revenue, only 7.64% in FY26 came under long-term contracts (RHP p.31). Read in numbers: in FY26 five customers gave a little under half of revenue and ten gave about two thirds.

04The growth record

SFC Environmental financials: revenue, profit and margins

Source: RHP p.94, RHP p.96, RHP p.92, RHP p.93, RHP p.190, RHP p.191.

• Revenue grew about 10.6% a year from FY24 to FY26 (our arithmetic, RHP p.94).
• Operating EBITDA grew about 10.5% a year (our arithmetic, RHP p.191).
• Profit after tax grew about 5.4% a year (our arithmetic, RHP p.94).
• The operating EBITDA margin moved down 5 basis points and the PAT margin down 199 basis points (our arithmetic, RHP p.191, RHP p.190).

Profit attributable to the company's own shareholders was ₹141.6 crore, ₹144.1 crore and ₹154.4 crore; diluted EPS was ₹15.16, ₹15.42 and ₹16.52 (RHP p.94, RHP p.95). Depreciation rose from ₹12.5 crore in FY24 to ₹27.8 crore in FY26 (RHP p.94).

Three months to June 30, 2026: revenue ₹133.9 crore and profit after tax ₹1.5 crore (RHP p.94). The company says it earns most of its sewage revenue in the second half of the year (RHP p.40).

05What the growth is made of

Revenue rose ₹146.1 crore from FY24 to FY26, 22.2% over two years (our arithmetic, RHP p.310). By segment:

• Solid-waste treatment rose from ₹50.2 crore to ₹140.2 crore, about 67.1% a year (RHP p.310).
• Wastewater treatment rose from ₹524.4 crore to ₹542.8 crore, about 1.7% a year (RHP p.310).
• Recycling and reuse added ₹14.2 crore in its first year (RHP p.310).
• Other operating revenue rose from ₹82.9 crore to ₹106.5 crore (RHP p.310).

Installations using the company's technology went from 577 at March 2024 to 705 at March 2026 (RHP p.299). The company bought IST-Anlagenbau GmbH, a solar sludge drying business, for €3.20 million with effect from July 30, 2025 (RHP p.347), and paid ₹33.4 crore for subsidiaries in FY26 (RHP p.34). Goodwill rose from ₹2.8 crore to ₹30.3 crore (RHP p.92). The prospectus does not give revenue from acquired businesses separately, and gives no volumes or prices, so the growth cannot be split into volume and price.

06Earnings quality

The item that needs explaining is cash. Trade receivables were ₹608.8 crore at March 2026 against FY26 revenue of ₹803.6 crore (RHP p.92, RHP p.94). The company links this to booking a large part of revenue in the fourth quarter (RHP p.40). In the June 2026 quarter operating cash flow was again negative, ₹(21.3) crore, even as receivables fell by ₹149.0 crore, because payables fell by ₹95.1 crore (RHP p.33).

07The balance sheet

Source: RHP p.92, RHP p.93.

• Net debt was ₹(49.4) crore at March 2024, ₹(52.3) crore at March 2025 and ₹38.8 crore at March 2026, the company's measure (RHP p.191).
• Fund and non-fund borrowings of the group were ₹253.1 crore at July 31, 2026 (RHP p.170).
• Contingent liabilities: a customs notice of ₹0.02 crore (RHP p.98).
• Promoters Sandeep Sudhakar Asolkar and Priya Sandeep Asolkar have given personal guarantees for company loans (RHP p.75).

After the issue: ₹42.2 crore of the fresh issue goes to prepay loans (RHP p.169). On March 2026 figures, borrowings would fall to about ₹153.4 crore (our arithmetic, RHP p.92, RHP p.93, RHP p.169). The as-adjusted figures are left blank until pricing.

08What the money is for

SFC Environmental IPO objects: what the money is for

Source: RHP p.168, RHP p.169; percentages are our arithmetic.

• Both amounts are to be spent in FY27 (RHP p.169).
• General corporate purposes cannot exceed 25% of gross proceeds (RHP p.169).
• The company has agreed to transfer Vasudha Waste Treatment Private Limited to its other subsidiary Hindustan Waste Treatment Private Limited under an agreement dated June 17, 2026 (RHP p.170).
• CARE Ratings Limited is the monitoring agency (RHP p.81).

Into the business ₹150.0 crore, before issue expenses (RHP p.3). To selling shareholders ₹517.5 crore at the upper band, for 15,682,750 shares (our arithmetic, RHP p.3).

09Who is selling

SFC Environmental IPO offer for sale: who is selling

Source: RHP p.3, RHP p.87; the last column is our arithmetic. Hardik Suresh Matalia also offers 36,750 shares, all of the 36,750 held (RHP p.3, RHP p.87).

The weighted average cost of acquisition is ₹36.72 a share for eight of the sellers and ₹42.85 for Jayshree Harit Shah (RHP p.1). At the upper band of ₹330 the price is about 9.0 times ₹36.72 (our arithmetic, RHP p.1).

10Promoters

The promoters are Sandeep Sudhakar Asolkar, Priya Sandeep Asolkar, Prachiti Sandeep Asolkar and Saketchandrasingh Pratapsingh Dhandoriya (RHP p.1). Sandeep Sudhakar Asolkar is Chairman and Managing Director (RHP p.38). The prospectus states that Sandeep Sudhakar Asolkar is the father of Prachiti Sandeep Asolkar (RHP p.372).

• Holding: 40,019,595 shares, 42.84% before the issue (RHP p.156). Asolkar Tradecraft Private Limited, in the promoter group, holds 4,978,320 shares, 5.33% (RHP p.163).
• Cost: Sandeep Sudhakar Asolkar's 13,500,000 shares held alone at ₹0.44 a share; the joint holding and Saketchandrasingh Pratapsingh Dhandoriya's at ₹36.72 (RHP p.158).
• Pay: Sandeep Sudhakar Asolkar ₹3.3 crore in FY24 and ₹4.2 crore in FY26; Saketchandrasingh Pratapsingh Dhandoriya ₹1.2 crore in FY26; Prachiti Sandeep Asolkar a salary of ₹0.61 crore in FY26 (RHP p.100).
• Dividends: ₹10.5 crore to Sandeep Sudhakar Asolkar in FY25 (RHP p.100). The company paid dividends of ₹9.7 crore in FY24, ₹31.7 crore in FY25 and ₹0.59 crore in FY26 (RHP p.97).
• Cases: 1 criminal and 4 tax proceedings against the promoters, ₹4.3 crore where quantifiable, which includes a former employee's legal notice (RHP p.37, RHP p.38).

11Who already owns it

SFC Environmental promoter holding before and after the IPO

• Promoters: 42.84% of 93,411,270 shares before the issue (RHP p.156, RHP p.90).
• After the issue at the upper band, with 4,670,000 promoter shares sold and 4,545,454 new shares issued: about 36.1% of 97,956,724 shares (our arithmetic, RHP p.3, RHP p.90).

Holders of 1% or more before the issue (RHP p.163, RHP p.164):

Also: Kumaraguru Madurakavi, Rajesh Kesavan Nambisan and Sandeep Sambhaji Parab 4.92% each, Jyoti Subodh Sapre 3.45%, Aakansha Unichem LLP 2.68%, Veera Venkata Satyanarayana Yannamani 2.30%, Dhanvallabh Ventures Fund - Scheme I 1.49% and Priyanka Amey Belorkar 1.04% (RHP p.163, RHP p.164). The company has 207 shareholders (RHP p.163).

When they came in: most holdings date from before September 2024, when bonus shares were issued (RHP p.157). Jaya Chandrakant Gogri, jointly with Chandrakant Vallabhaji Gogri, a shareholder with special rights, acquired 201,250 shares at ₹343 a share on October 12 and 13, 2026 (RHP p.158). The weighted average cost of shares acquired in the year before the prospectus was ₹219.32 (RHP p.156).

12What changed just before the IPO

• Share split and bonus: each ₹10 share split into five of ₹2, then bonus shares at two for every one held, record date September 4, 2024 (RHP p.184, RHP p.185).
• Public company: converted with a fresh certificate dated August 13, 2024 (RHP p.3).
• Acquisitions: stakes in Hindustan Waste Treatment Private Limited in October 2023, February 2024 and March 2025 (RHP p.346); IST-Anlagenbau GmbH for €3.20 million in July 2025 (RHP p.347); further shares of SFC Umwelttechnik GmbH effective June 26, 2025 (RHP p.346).
• New segment: first recycling and reuse order in July 2025 (RHP p.310).
• Order book: ₹560.4 crore at March 2025, ₹1,574.5 crore at March 2026 and ₹1,570.1 crore at June 2026 (RHP p.191, RHP p.190).
• Borrowings: ₹83.7 crore at March 2025, ₹195.6 crore at March 2026 (RHP p.92, RHP p.93).
• Promoter pay: total promoter remuneration ₹3.4 crore in FY24 and ₹6.0 crore in FY26 (our arithmetic, RHP p.100).
• Sale at ₹343: 201,250 shares acquired at ₹343 in October 2026 (RHP p.158).
• New units: the Bhamboli unit near Pune started on November 15, 2025, after Decanter Unit I was vacated in April 2025 (RHP p.53).
• Records: discrepancies in old corporate filings were taken on record by the RoC on June 12, 2025 (RHP p.37).
• Auditor: no change of statutory auditor in the three years before the prospectus (RHP p.120).

13Capacity and expansion

Source: RHP p.53, RHP p.54, RHP p.55; certified by a chartered engineer (RHP p.54).

• Blower utilisation was 10.00% in FY25 and 20.00% in FY24 (RHP p.55).
• The Bhamboli unit started on November 15, 2025, so its FY26 figure covers part of the year (RHP p.53).
• A subsidiary has bought 7.73 hectares in Nanded for an agricultural-waste biogas plant (RHP p.300).

The fresh issue funds working capital and loan prepayment, not capacity (RHP p.169). The prospectus does not give the capacity or throughput of the waste plants the company runs.

14Market size and industry structure

SFC Environmental industry: market size and growth

The industry chapter draws on "Industry Report on Indian STP, Tertiary Treatment, MSW Management, and Biogas Market" dated September 23, 2026, by Frost & Sullivan (India) Private Limited, commissioned and paid for by the company for this issue (RHP p.298). Every figure below is the commissioned report's, as quoted in the prospectus.

As claimed: the report puts India's water and wastewater treatment market at ₹26,800 crore in FY2025 and an estimated ₹29,200 crore in FY2026 (RHP p.230).

The part that is addressable: the company sells into sewage treatment, where it supplies the process package, plus tertiary treatment and municipal solid waste. The report says the C-Tech package is about 10 to 15% of an STP's total cost, and disc filters and blowers 5 to 8% each (RHP p.231). An STP of 20 to 100 MLD costs ₹30 to ₹100 crore in total (RHP p.230). Tertiary treatment is put at ₹1,870 crore in FY2026 (RHP p.252) and the solar sludge dryer market at ₹300 crore (RHP p.286).

What the company is today: FY26 wastewater treatment revenue of ₹542.8 crore (RHP p.310) against a ₹29,200 crore water and wastewater market is about 1.9% (our arithmetic, RHP p.230). The report credits the company with over 80% of SBR technology in India (RHP p.299).

Size over time: the market grew 7.2% in FY2025 (RHP p.230). The report projects it to grow 9.3% a year from FY2026 to ₹45,500 crore by FY2031 (RHP p.230). It projects tertiary treatment to reach ₹7,013 crore by FY2031 (RHP p.252), and the revenue potential from municipal waste to rise from ₹21,740 crore in FY2026 to ₹32,920 crore by FY2031 (RHP p.267). Those projections are the report's, not newboard's.

Segments: the report splits sewage treatment by technology. SBR has an estimated 30 to 35% of the market and about 60% of treatment capacity added from FY2021 to FY2025; the rest is activated sludge, membrane bioreactors, moving bed reactors and other methods (RHP p.248). The company sells into the SBR segment.

What drives demand: urban India generated an estimated 90,061 MLD of sewage in FY2026, against 31,841 MLD of installed treatment capacity in the latest CPCB inventory (RHP p.235). The report says 63.5% of sewage goes untreated (RHP p.234). Under AMRUT 2.0, 592 sewerage projects worth ₹67,607.67 crore covering 6,739 MLD were approved by March 2025 (RHP p.233). Under Namami Gange, 218 projects worth ₹35,794 crore with 6,610 MLD were taken up (RHP p.233). States have issued reuse policies, such as Odisha's in April 2026 (RHP p.256).

Structure: the report lists Thermax, Xylem Inc., Praj Industries, Alfa Laval and Ion Exchange as leading sewage technology and equipment suppliers, and says Va Tech Wabag is not a close peer because most of its revenue is EPC (RHP p.247). The value chain runs from project owners to EPC contractors, technology suppliers and component makers (RHP p.247).

Inputs and trade: the company imports key parts such as decanter core parts, membranes, turbo blowers and fibre disc filters from the United States, South Korea, the Netherlands, Austria, Germany and China (RHP p.49).

Rules: the chapter ties demand to discharge standards, the National Framework for Safe Reuse of Treated Wastewater (2023) and state reuse policies (RHP p.232, RHP p.238). The Tariff Policy, 2016 requires thermal plants within 50 km of an urban STP to use treated waste water (RHP p.255).

What the chapter says can go wrong: the report lists market restraints for wastewater treatment (RHP p.234) and ten challenges for sewage treatment beyond funding and infrastructure (RHP p.240). The prospectus's own risk factors add seasonality, dependence on government agencies and competition (RHP p.71, RHP p.64, RHP p.74).

15Competitive position

SFC Environmental competitors

Source: RHP p.190, RHP p.191. The prospectus says peer figures may not be comparable (RHP p.75).

What the company gives as reasons customers choose it: being first with SBR in India, C-Tech's installed base, an in-house equipment package and an exclusive DuPont distribution agreement in recycling (RHP p.311, RHP p.299). The prospectus also says new technologies could displace its processes (RHP p.28).

16Peers the company named

Peers named in the offer document: Thermax Limited, Praj Industries Limited and Ion Exchange (India) Limited (RHP p.186).

SFC Environmental listed peers

Source: RHP p.186. Peer P/E is on BSE closing prices of October 16, 2026 and FY26 diluted EPS (RHP p.186). The prospectus gives the highest peer P/E as 220.77, the lowest as 31.34 and the average as 101.38 (RHP p.185).

All three are several times larger. Thermax's revenue is about 13 times the company's (our arithmetic, RHP p.186), and its business spans energy and environment well beyond sewage treatment. Praj's P/E of 220.77 rests on FY26 EPS of ₹1.30 (RHP p.186).

17Valuation at the issue price

SFC Environmental IPO valuation and P/E

At the upper band of ₹330, with 4,545,454 new shares from the ₹150.0 crore fresh issue added to 93,411,270 existing shares (our arithmetic, RHP p.3, RHP p.90):

Source: RHP p.90, RHP p.94, RHP p.184, RHP p.186, RHP p.191; our arithmetic. At the lower band of ₹313 the fresh issue is 4,792,332 shares and the market capitalisation ₹3,073.8 crore (our arithmetic, RHP p.90).

Enterprise value is the market capitalisation on the shares before the issue, ₹3,082.6 crore, plus March 2026 net debt of ₹38.8 crore, the company's measure (our arithmetic, RHP p.191).

Where the issue sits against the peers the prospectus names: the P/E of 20.9× is about 60% below the peer median of 52.01, and below the lowest peer, Ion Exchange, at 31.34 (our arithmetic, RHP p.186). The company's FY26 RoNW of 21.25% is above each peer's (RHP p.186).

18Risks, in plain words

SFC Environmental IPO risks

Cash and receivables → profit has not come in as cash, and receivables grew faster than sales → operating cash flow was ₹(25.8) crore in FY26 and receivable days 282 (RHP p.96, RHP p.41).

Customers → ten customers gave 64.44% of FY26 revenue, mostly without long-term contracts (RHP p.31) → losing one large builder would cut revenue → the largest was 14.34% in FY26 (RHP p.31).

Government dependence → the waste business depends largely on government agencies and oil marketing companies (RHP p.64) → Goa Waste Management Corporation and an oil company are its main customers (RHP p.307).

Seasonality → most sewage revenue is earned in the second half (RHP p.40) → June 2026 quarter profit was ₹1.5 crore (RHP p.94).

Order book → orders may be delayed, changed or cancelled (RHP p.56) → the order book was ₹1,570.1 crore at June 2026 (RHP p.190).

Suppliers and imports → key parts come from a few foreign suppliers without long-term contracts (RHP p.48, RHP p.49), and the DuPont supplier can end the WRR agreement if minimum quantities are not met (RHP p.48).

Subsidiaries' cases → 2 criminal, 5 tax, 10 regulatory and 2 material civil proceedings against subsidiaries (RHP p.38).

Issue-specific → ₹517.5 crore of the ₹667.5 crore issue at the upper band goes to selling shareholders (our arithmetic, RHP p.3). Promoters keep about 36.1% after the issue (our arithmetic, RHP p.156).

19Litigation and regulatory matters

Cases against SFC Environmental and its promoters

Source: RHP p.37, RHP p.38, to the extent quantifiable.

• The amounts for the company, directors and promoters include a legal notice from a former employee of Hindustan Waste Treatment Private Limited against that subsidiary, the company and Sandeep Sudhakar Asolkar (RHP p.38).
• The material civil litigation involving SFC Umwelttechnik GmbH and others is for €6.25 million, ₹66.7 crore at the October 16, 2026 rate (RHP p.38).
• One criminal proceeding is pending against key managerial personnel, ₹2.6 crore including the same notice (RHP p.38).
• There is no disciplinary action by SEBI or the exchanges against the promoters in five years (RHP p.37).

20Related-party transactions

Source: RHP p.100, RHP p.101; dividends are our arithmetic from the listed payments (RHP p.100).

• Loans from the company to subsidiary Hindustan Waste Treatment Private Limited were ₹114.4 crore in FY26 against ₹12.3 crore in FY25 (RHP p.102).
• Purchases from subsidiary Fine Aeration Systems Private Limited were ₹42.0 crore in FY26 (RHP p.101).
• These subsidiary transactions are eliminated on consolidation (RHP p.101).
• The company says all related party transactions were at arm's length (RHP p.99).

21What the offer document does not say

• The price band, lot, post-issue share count and general corporate purposes amount: left blank ([●]) (RHP p.3, RHP p.90, RHP p.169).
• Volumes and prices: the number of packages supplied and their value are not given, so growth cannot be split into volume and price.
• Throughput of the waste plants it runs: not given in the pages read.
• Why receivables over six months old rose: the amount is given (RHP p.40) but not explained by customer.
• Profit of acquired businesses: not given separately.
• Customer names for the unnamed top-ten customers: withheld for lack of consent (RHP p.31).

22Five questions for management

1. Of the ₹608.8 crore of trade receivables at March 2026, how much was owed by government bodies and how much by EPC contractors, and how much was collected by September 2026?
2. What share of the ₹1,570.1 crore June 2026 order book is the two compressed biogas plants worth ₹501.7 crore, and over how many years will it be executed?
3. Why did the wastewater treatment operating EBITDA margin fall to 0.42% in the June 2026 quarter from 31.81% in FY26, and how much of that is seasonal?
4. What did IST-Anlagenbau GmbH and the other acquisitions add to FY26 revenue and profit?
5. On what terms did a shareholder with special rights acquire shares at ₹343 in October 2026, above the upper band of ₹330?

24Draft to final: what changed

The fresh issue of up to ₹150.0 crore and the three lead managers, IIFL, JM Financial and Nuvama, are the same in both documents (DRHP p.29, DRHP p.2, RHP p.3).

1Sources and cited facts

This study was read from 1 document the company filed. The 166 figures it cites are listed under the document each came from, with the page and the sentence as printed.