Quality Enviro Engineers Limited IPO

01At a glance

What the company does: designs, fabricates and supplies equipment for dust suppression, sewer and drain cleaning, solid waste collection and municipal utility work from one owned factory at Faridnagar, Ghaziabad, and also operates and maintains such equipment for customers and trades in bins, mobile toilets, batteries and solar systems (DRHP p.201, DRHP p.47).

Who pays it: 123 customers in FY26, 56 of them government or government-controlled bodies such as municipal corporations, urban local bodies, defence establishments, public sector undertakings and ports (DRHP p.139, DRHP p.44). Government bodies brought 38.57% of FY26 revenue and private customers 61.43% (DRHP p.45). Customers are not named in the document; the top ten are listed only as Customer 1 to Customer 10 (DRHP p.215).

Why it is raising money: ₹20.0 crore of the fresh issue is for working capital and ₹8.0 crore for repaying HDFC Bank loans; the general corporate purposes amount is left blank (DRHP p.118). There is no offer for sale (DRHP p.1).

How fast it has grown: revenue from ₹40.2 crore in FY24 to ₹63.0 crore in FY26, about 25.2% a year, and profit after tax from ₹2.6 crore to ₹5.0 crore, about 40.3% a year (our arithmetic, DRHP p.80).

The one thing to understand: FY26 profit of ₹5.0 crore came with an operating cash outflow of −₹1.7 crore, because inventory rose from ₹1.1 crore to ₹14.4 crore, mostly work in progress, and a quarter of FY26 profit before tax came from other income (DRHP p.81, DRHP p.42, our arithmetic, DRHP p.80).

02The business, in plain words

What Quality Enviro Engineers does

Quality Enviro Engineers builds special-purpose machines that city governments and contractors use to keep streets, drains and air clean. Its four product groups are air pollution equipment (truck-mounted anti-smog guns, fog cannons, water sprinklers, outdoor air purifiers, water tankers), liquid waste equipment (sewer suction and jetting machines, super suckers, amphibious excavators, drain cleaners, weed harvesters), solid waste equipment (refuse compactors, dumper placers, tippers, road sweepers, sorting equipment) and utility vehicles (sky lifts, knuckle boom cranes, recovery vans, cattle catchers, tree ambulances, funeral and fire rescue vehicles) (DRHP p.201, DRHP p.202 to DRHP p.208).

A municipal body, government department or private contractor issues a tender or order for, say, four truck-mounted anti-smog guns with five years of upkeep → the company buys a truck chassis, steel, pumps and hydraulics, designs and fabricates the body in its factory, fits and tests the systems and delivers the machine → it then runs or maintains the machine under a service contract → it is paid a price per machine, plus a contract fee for operation and maintenance (DRHP p.228 to DRHP p.230, DRHP p.230).

Most new business comes through tenders. In FY26 the company bid for 884 tenders and won 55, a success rate of 6.22%, worth ₹33.4 crore (DRHP p.139). It sells on the Government e-Marketplace (GeM), where in 2024 the Quality Council of India recognised it as the original equipment maker for 28 listed products (DRHP p.201). It also trades items it does not make, such as mobile toilets, dustbins, batteries and solar systems (DRHP p.209).

The company was incorporated on May 6, 2016 as Quality Enviro Engineers Private Limited and became a public company with a fresh certificate dated December 19, 2024 (DRHP p.2). It began in a 4,000 square foot leased shed in Sahibabad in 2017, moved to a larger leased site, bought 0.327 hectare of land at Faridnagar in 2022 and started work there in FY26 (DRHP p.247, DRHP p.47). The registered office is rented at ₹57,068 a month (DRHP p.65). It has no subsidiary, joint venture or group company (DRHP p.249, DRHP p.356). It employed 156 people at March 31, 2026, 107 of them in operation and maintenance (DRHP p.234).

Earnings equation: Revenue = machines supplied × price per machine + service contract billings + traded goods. The document gives machines made by category, 465 units in FY26 against 620 in FY24, and revenue by category, but no price per machine and no count of machines sold, so the equation cannot be filled in (DRHP p.227, DRHP p.216).

03Where the money comes from

The company reports one segment and sells only in India (DRHP p.340, DRHP p.57). It splits revenue three ways: by business line, by type of customer and by state.

Source: DRHP p.46, DRHP p.44, DRHP p.45, DRHP p.57. The state split is by place of supply on the invoice, not the customer's address (DRHP p.57). Jharkhand was 24.35% of FY25 revenue and 3.72% in FY26 (DRHP p.57).

Within manufactured products, FY26 revenue was ₹10.1 crore from air pollution equipment, ₹9.8 crore from liquid waste equipment, ₹1.6 crore from solid waste equipment and ₹10.2 crore from utility vehicles and others (DRHP p.216). The mix swings: solid waste equipment was 57.60% of product revenue in FY25 and 4.96% in FY26 (DRHP p.216). Within services, FY26 revenue was ₹8.8 crore from installation, commissioning and training, ₹5.8 crore from operation and maintenance and ₹7.9 crore from other services (DRHP p.217).

Quality Enviro Engineers customers: how concentrated the revenue is

Source: DRHP p.44. In FY26 one customer brought ₹9.2 crore, 14.62% of revenue, and the top ten together brought ₹34.6 crore, 54.92% (DRHP p.215). So just over half of FY26 revenue came from ten customers, against seven in ten in FY24 (DRHP p.44). Revenue from customers who had not bought in the previous year was ₹34.5 crore in FY26, 54.72% of revenue, against ₹11.3 crore in FY24 (our arithmetic, DRHP p.139).

Read from the filing: the FY24 largest customer's revenue of ₹8.9 crore (885.04 in ₹ lakh) is the same figure as the company's FY24 sales to Green India Envoiro & Infrustructure, the proprietorship of the promoter Neha Srivastava, which the document gives as 22.00% of FY24 revenue (DRHP p.215, DRHP p.48). FY25 sales to that firm, ₹2.2 crore or 4.31%, match the FY25 fifth largest customer exactly (DRHP p.48, DRHP p.215). The document does not name its customers, so this match is arithmetic, not a disclosure.

On the supply side, the top ten suppliers were 62.65% of FY26 purchases, the largest 12.90% (DRHP p.55). There are no long-term supply contracts (DRHP p.212).

04The growth record

Quality Enviro Engineers financials: revenue, profit and margins

Source: DRHP p.80, DRHP p.81, DRHP p.79, DRHP p.137, DRHP p.138, converted from ₹ lakh. Revenue went from ₹40.2 crore in FY24 to ₹63.0 crore in FY26 and profit after tax from ₹2.6 crore to ₹5.0 crore (DRHP p.80). EBITDA here excludes other income (DRHP p.138).

Our arithmetic over FY24 to FY26: revenue grew about 25.2% a year (our arithmetic, DRHP p.80), which matches the 25.15% the company states (DRHP p.137); EBITDA about 19.9% a year (our arithmetic, DRHP p.137); and profit after tax about 40.3% a year (our arithmetic, DRHP p.80). EBITDA margin moved from 11.22% to 10.29%, down 93 basis points, so from 11.2% to 10.3% rounded (DRHP p.137). Revenue rose 28.07% in FY25 and 22.30% in FY26 (DRHP p.330).

The year ends on March 31 throughout. The restatement changed reported profit: audited profit after tax was ₹2.9 crore in FY24 and ₹3.9 crore in FY25, restated to ₹2.6 crore and ₹4.3 crore, mainly for a gratuity provision first booked in FY24 (DRHP p.289). All three years were audited by D A R P N and Company, with unmodified opinions (DRHP p.278).

What sits around the record:

• Cash: operating cash flow was −₹1.7 crore in FY26, −₹8.8 crore in FY25 and ₹3.7 crore in FY24 (DRHP p.81). In FY26 inventory rose ₹13.3 crore (DRHP p.81).
• Other income was ₹1.8 crore in FY26, of which ₹1.0 crore was interest on deposits and ₹0.70 crore balances written back (DRHP p.308). That is 25.3% of FY26 profit before tax of ₹6.9 crore (our arithmetic, DRHP p.80).
• Debt and deposits: borrowings were ₹12.7 crore at March 31, 2026 (DRHP p.79), debt to equity 0.39 times, about 0.4× (DRHP p.138). Against that the company held ₹10.9 crore of fixed deposits of more than twelve months and ₹3.6 crore of cash and short deposits, so deposits exceeded borrowings, and net debt to FY26 EBITDA was about −0.3× (our arithmetic, DRHP p.79). The overdraft is secured first against those deposits (DRHP p.298). Return on capital employed was 19.23%, so 19.2% rounded (DRHP p.137).
• Customers and suppliers: the largest customer was 14.62% of FY26 revenue, so 14.6% rounded, the top five 39.66%, so 39.7%, and the top ten 54.92%, so 54.9% (DRHP p.44); the top ten suppliers were 62.65% of FY26 purchases, so 62.7% (DRHP p.55).
• Related-party sales: sales to Green India Envoiro & Infrustructure were 22.00% of FY24 revenue, so 22.0% (DRHP p.84).
• Contingent liabilities: bank guarantees of ₹2.4 crore and disputed tax demands of ₹0.69 crore at March 31, 2026, so ₹3.0 crore in all (our arithmetic, DRHP p.82).
• Capacity: overall capacity utilisation was 30.49% in FY26, so 30.5% rounded, against 83.72% in FY25 (DRHP p.139).
• Order book: unexecuted orders of ₹32.7 crore at September 12, 2026 (DRHP p.232).
• Industry: the commissioned report places the company within industrial products and capital goods, in municipal and waste management equipment (DRHP p.157).

05What the growth is made of

Revenue rose ₹22.8 crore from FY24 to FY26 (our arithmetic, DRHP p.80). The split by business line shows where it came from (DRHP p.46):

Services: up from ₹5.0 crore to ₹22.8 crore, about ₹17.8 crore of the increase (our arithmetic, DRHP p.46). Most of the FY26 jump is installation, commissioning and training, ₹8.8 crore against ₹0.07 crore in FY25 (DRHP p.217). Recurring service revenue was ₹17.2 crore in FY26 (DRHP p.139).

Trading: up from ₹0.29 crore to ₹8.6 crore, about ₹8.3 crore of the increase (our arithmetic, DRHP p.46).

Manufactured products: down from ₹34.9 crore to ₹31.6 crore, a fall of about ₹3.3 crore, after a rise to ₹39.9 crore in FY25 (our arithmetic, DRHP p.46).

Volume: machines made went from 620 units in FY24 to 833 in FY25 and 465 in FY26, with solid waste equipment going from 474 to 705 to 267 units (our arithmetic, DRHP p.227). Orders executed rose from 137 to 229 and their value from ₹27.4 crore to ₹44.5 crore (DRHP p.139).

Customers and geography: the customer count went from 73 to 123, the states served from 14 to 18, and revenue from new customers from ₹11.3 crore to ₹34.5 crore (DRHP p.139). Delhi alone went from ₹9.7 crore to ₹27.0 crore (DRHP p.57).

So the growth over two years came from services and trading, not from more machines. The document does not give prices per machine or the margin on each line, so the increase cannot be split further into volume and price. That is the finding.

06Earnings quality

The item that needs explaining is inventory. At March 31, 2026 it was ₹14.4 crore, against ₹1.1 crore a year earlier, and ₹9.5 crore of it, 66.18%, was work in progress (DRHP p.42). The company says the build-up is several orders being made at once, and that FY26 purchases rose 73.09% to procure materials for orders in hand (DRHP p.122, DRHP p.330). Booking ₹10.6 crore of work in progress and finished goods lowered FY26 expenses by that amount (DRHP p.80). Purchases were 86.17% of FY26 revenue, against 62.23% in FY24 (DRHP p.212).

Profit also leans on items outside operations. FY26 other income of ₹1.8 crore includes ₹0.70 crore of old balances written back (DRHP p.308). On the expense side the company wrote off ledger balances of ₹0.42 crore in FY26, ₹1.0 crore in FY25 and ₹0.43 crore in FY24, and paid ₹0.64 crore in FY25 and ₹0.45 crore in FY24 under court-ordered mediation settlements (DRHP p.310). Receivables of ₹0.83 crore owed by Kanpur Nagar Nigam for more than three years are in mediation and not provided for (DRHP p.306). The balances of receivables, deposits, payables and advances are stated to be subject to confirmation and reconciliation (DRHP p.291).

07The balance sheet

At March 31, 2026 total assets were ₹74.7 crore: trade receivables ₹33.6 crore, inventories ₹14.4 crore, fixed deposits of more than twelve months ₹10.9 crore, cash and short deposits ₹3.6 crore, short-term loans and advances ₹4.2 crore, other current assets ₹3.7 crore and property, plant and equipment ₹4.1 crore (DRHP p.79). Against them: short-term borrowings ₹11.6 crore, long-term borrowings ₹1.1 crore, trade payables ₹23.2 crore, other current liabilities ₹3.6 crore, short-term provisions ₹2.3 crore and net worth ₹32.6 crore (DRHP p.79).

Borrowings at March 31, 2026 by type: an HDFC Bank overdraft of ₹11.2 crore at 8.50% against a ₹13.0 crore limit, an HDFC term loan of ₹1.2 crore, an HDFC vehicle loan of ₹0.23 crore and an unsecured NBFC business loan of ₹0.05 crore at 18.09% (DRHP p.321, DRHP p.322).

In FY24 the company carried fifteen unsecured business loans from banks and NBFCs at 15.00% to 18.50%; all but the Neo Growth loan were repaid by March 2026 (DRHP p.299). The HDFC facilities are secured against the fixed deposits, two Ghaziabad properties and the Faridnagar factory, and guaranteed personally by Ashwani Srivastava, Neha Srivastava, Rajiv Kumar and Devendra Singh (DRHP p.298, DRHP p.322).

Contingent liabilities were bank guarantees of ₹2.4 crore and disputed tax of ₹0.69 crore (DRHP p.82). There were no capital commitments (DRHP p.82).

Debt grew after the balance sheet date. A fresh overdraft of ₹18.0 crore was sanctioned on July 18, 2026, and ₹17.5 crore of it was drawn at September 5, 2026; the three HDFC loans listed for repayment totalled ₹18.8 crore outstanding on that date (DRHP p.129).

Source: DRHP p.79, DRHP p.118, DRHP p.342. The capitalisation statement leaves the post-issue column blank (DRHP p.342). Because borrowings at September 2026 were already above the March figure, the March balance sheet less ₹8.0 crore would not describe the position after the issue; the document gives no later balance sheet.

08What the money is for

Quality Enviro Engineers IPO objects: what the money is for

Source: DRHP p.118, DRHP p.130. The rupee size of the fresh issue depends on the price, which is not set, so the share of each object cannot be worked out (DRHP p.1).

Working capital, ₹20.0 crore: ₹15.0 crore in FY27 and ₹5.0 crore in FY28 (DRHP p.119). The company projects net working capital of ₹52.2 crore at March 2027 and ₹56.3 crore at March 2028, against ₹30.5 crore at March 2026, citing the ₹32.7 crore order book (DRHP p.118, DRHP p.120). The projection assumes receivable days of 185 and 166, inventory days of 128 and 125, and payable days falling to 106 and 98, which the company says the issue money will allow (DRHP p.121, DRHP p.125).

Debt repayment, ₹8.0 crore: full or part repayment of an HDFC vehicle loan, an HDFC term loan and the HDFC overdraft, with ₹18.8 crore outstanding across the three at September 5, 2026, all in FY27 (DRHP p.128, DRHP p.129, DRHP p.119). Prepayment may cost up to 4% of the sanctioned amount on the overdraft (DRHP p.129).

The objects have not been appraised by any bank or financial institution, and no monitoring agency will be appointed because the fresh issue is below ₹50.0 crore (DRHP p.133).

Into the business the whole fresh issue of up to 48,00,000 shares, at a price not yet set (DRHP p.1). To selling shareholders nothing; there is no offer for sale (DRHP p.1).

09Who is selling

Quality Enviro Engineers IPO offer for sale: who is selling

The cover states that the entire issue is a fresh issue and that offer for sale details are not applicable (DRHP p.1). Promoters and the promoter group will not take part in the issue (DRHP p.116). Promoters, the promoter group and directors have not bought or sold shares in the six months before filing (DRHP p.112).

10Promoters

The promoters are Ashwani Srivastava and Neha Srivastava, who together hold 93,50,000 shares, 72.08% before the issue (DRHP p.270). The promoter group table lists each as the spouse of the other (DRHP p.274). There is no corporate promoter (DRHP p.271).

Ashwani Srivastava, aged 47, is Chairman and Managing Director, has been with the company since incorporation, has 14 years in the industry, completed high school and was earlier a territory manager at Kam-Avida Enviro Engineers Private Limited (DRHP p.254). Kam-Avida Enviro Engineers Pvt Ltd is one of the competitors the commissioned report names (DRHP p.195). Neha Srivastava, aged 36, was a director from incorporation until July 18, 2023 and runs Green India Envoiro & Infrustructure, a proprietorship, since 2017 (DRHP p.271). The other whole-time directors, Devendra Singh and Rajiv Kumar, are not promoters and hold no shares (DRHP p.259).

Pay: Ashwani Srivastava was paid ₹0.24 crore in FY24 and FY25 and ₹0.36 crore in FY26, and Neha Srivastava ₹0.05 crore in FY24, so promoter remuneration went from ₹0.29 crore in FY24 to ₹0.36 crore in FY26 (DRHP p.84). The new terms from August 14, 2026 are ₹0.42 crore a year for Ashwani Srivastava (DRHP p.257).

Other business: Green India Envoiro & Infrustructure did similar work for similar customers and traded with the company: sales to it of ₹8.9 crore in FY24, ₹2.2 crore in FY25 and ₹0.28 crore in FY26, and purchases of goods and services from it of ₹4.4 crore in FY25 (DRHP p.48).

Its GST registration was cancelled from August 31, 2026, and the company signed a non-compete and confidentiality agreement with it on September 30, 2026, the day of the filing (DRHP p.60).

In the last three years Ashwani Srivastava left Enprotech Eco Machines Private Limited (shares transferred December 31, 2024) and Inventa Energy Infra India Private Limited (shares transferred September 15, 2026), and Eco Waste Infra & Equipment Private Limited was struck off; a private company named Green India Envoiro & Infrustructure Private Limited was struck off on May 12, 2026 (DRHP p.273). The promoter group also lists Comp-Tech Engineers, a partnership (DRHP p.275).

Funds routed through the promoter's account: the related-party note records money received through and repaid from Ashwani Srivastava's account of ₹11.2 crore in FY24, ₹2.4 crore in FY25 and ₹7.7 crore in FY26, in each year equal in and out (DRHP p.85). The document does not explain what these flows were.

Pledges and guarantees: no promoter shares are pledged (DRHP p.112). Both promoters guarantee the HDFC Bank facilities personally (DRHP p.322).

Cases: two criminal cases against Ashwani Srivastava, both for rash and negligent driving, from FIRs of 2014 and 2023, are pending, with bail granted; no amount is stated (DRHP p.344). There are no tax, regulatory or material civil cases against the promoters (DRHP p.346). In July 2026 the Registrar of Companies fined Ashwani Srivastava ₹1 lakh, about ₹0.01 crore, over the handling of the May 2024 placement money (DRHP p.52). Neither promoter is barred from the capital markets or named a wilful defaulter (DRHP p.274).

Promoter economics: each promoter subscribed 25,000 shares at ₹10 on incorporation and took 1,00,000 shares in December 2020 and 3,00,000 shares in December 2022 in ₹10 rights issues, then received 42,50,000 bonus shares in August 2026 (DRHP p.111). Their average cost is ₹0.91 a share (DRHP p.66). No promoter has sold shares in the issue or before it (DRHP p.1, DRHP p.112).

11Who already owns it

Quality Enviro Engineers promoter holding before and after the IPO

Source: DRHP p.110. There are 1,29,71,750 shares of ₹10 before the issue and 121 shareholders (DRHP p.98, DRHP p.115). The document leaves the after-issue holding blank (DRHP p.112). If all 48,00,000 new shares are issued, the total becomes 1,77,71,750 and the promoters' 72.08% becomes about 52.6%, so 72.1% → 52.6% (our arithmetic, DRHP p.112).

Izuz Consultancy Private Limited holds 2.43%, so 2.4% rounded (DRHP p.110); it was allotted 13,587 shares at ₹551.20 in May 2024 and held 3,26,673 shares ten days before filing (DRHP p.101, DRHP p.110). Mittal Growth Partners LLP holds 2.30%, so 2.3% rounded (DRHP p.110); it does not appear among the May 2024 allottees, and the document does not say how it came to hold the 27,135 shares it had a year before filing (DRHP p.101, DRHP p.110). Skyveil Trade Solutions LLP holds 1.15%, so 1.2% rounded, from 13,588 shares taken at ₹551.20 in May 2024 (DRHP p.110, DRHP p.101).

Outside money came in twice. Puneet Singh Marwah was allotted 93,400 shares at ₹82.50 on April 16, 2024, and 41 allottees took 2,35,850 shares at ₹551.20 on May 22, 2024, among them Planify Capital Limited, Sixth Sense Venture Partners LLP and the lead manager, Shannon Advisors Private Limited, with 1,820 shares (DRHP p.100, DRHP p.101). The two placements raised ₹13.8 crore (DRHP p.142). After the 10:1 bonus those prices equal about ₹7.50 and ₹50.11 a share (our arithmetic, DRHP p.100). The document states that the lead manager and its associates hold no shares at the date of filing (DRHP p.115).

12What changed just before the IPO

• Revenue and profit: revenue went from ₹40.2 crore in FY24 to ₹63.0 crore in FY26 and profit after tax from ₹2.6 crore to ₹5.0 crore (DRHP p.80).
• Receivables went from 175 days in FY24 to 266 in FY25 and 195 in FY26 (DRHP p.40).
• Inventory went from ₹1.1 crore to ₹14.4 crore in FY26, two thirds of it work in progress (DRHP p.42).
• Business mix: services and trading went from 13.17% of revenue in FY24 to 49.81% in FY26 (our arithmetic, DRHP p.46); government customers fell from 62.14% to 38.57% (DRHP p.44, DRHP p.45).
• Related-party sales: sales to Green India Envoiro & Infrustructure fell from 22.00% of FY24 revenue to 0.45% in FY26; the firm's GST registration was cancelled from August 31, 2026 and a non-compete was signed on September 30, 2026 (DRHP p.48, DRHP p.60).
• Promoter pay went from ₹0.29 crore in FY24 to ₹0.36 crore in FY26 (DRHP p.84), and to ₹0.42 crore a year for Ashwani Srivastava from August 14, 2026 (DRHP p.257).
• Placements: 93,400 shares at ₹82.50 in April 2024 and 2,35,850 shares at ₹551.20 a share in May 2024, the last cash allotment (DRHP p.100).
• Bonus issue: 10:1, allotted August 25, 2026, 1,17,92,500 shares, the last allotment before the IPO, with no price paid (DRHP p.100).
• Share split: none appears in the share capital history; every allotment is at a face value of ₹10 (DRHP p.100).
• Public company: converted with a fresh certificate dated December 19, 2024 (DRHP p.86).
• Auditor change: J S R P & Associates resigned on March 16, 2023 citing other assignments, and D A R P N and Company was appointed on March 20, 2023 and then for five years from September 30, 2023 (DRHP p.94).
• Factory: operations moved in FY26 from a leased site on Bulandshahr Road to the owned Faridnagar factory; a ₹2.6 crore building was capitalised (DRHP p.47, DRHP p.303).
• Deposits and debt: long fixed deposits rose from ₹0.75 crore to ₹10.7 crore in FY25, and borrowings from ₹2.5 crore to ₹12.7 crore over the two years (DRHP p.305, DRHP p.79); an ₹18.0 crore overdraft was sanctioned in July 2026 (DRHP p.129).
• Board and officers: a CFO and a company secretary from May 14, 2026; three independent directors and the present designations from August 14, 2026 (DRHP p.268, DRHP p.252).
• Pollution consent: the factory's consent to operate expired on March 31, 2026 and the factory kept working until a revised consent arrived on September 21, 2026 (DRHP p.62).
• Penalties: on July 10, 2026 the Registrar of Companies fined the company and officers over a December 2020 filing and over the May 2024 placement money, which went into the existing current account and was used before allotment (DRHP p.52).
• Registered office moved to Dada Market, Sahibabad on March 17, 2025 (DRHP p.247).

13Capacity and expansion

Source: DRHP p.227. In FY25 the same categories ran at 71.00%, 35.60%, 88.10% and 82.00% on lower installed figures of 100, 45, 800 and 50 units (DRHP p.227). Capacity is certified by Sushant Aggarwal, Chartered Engineer, by certificate dated September 18, 2026 (DRHP p.227). The KPI table gives a single company-wide utilisation of 30.49% in FY26, 83.72% in FY25 and 62.31% in FY24 without showing how it is combined (DRHP p.139).

The factory sits on 0.327 hectare and is equipped mainly with welding, cutting, bending and painting machines, one laser gantry and one overhead crane (DRHP p.219 to DRHP p.227). The issue funds no new capacity (DRHP p.118). The step from capacity to revenue cannot be made here: the document gives units made but not units sold or prices.

14Market size and industry structure

Quality Enviro Engineers industry: market size and growth

As claimed: the industry chapter is drawn from the "Industry Report on Environmental, Municipal & Sanitation Equipment Industry" by B2K Analytics Private Limited, dated September 28, 2026, which the company commissioned and paid for exclusively for the issue under an engagement letter of August 21, 2026 (DRHP p.463, DRHP p.200, DRHP p.65). The commissioned report gives no single size for the municipal equipment market the company sells into. It sizes neighbouring markets instead: the Indian waste management industry at USD 4,742 million in 2020 rising to USD 6,887 million by 2030, a figure that mixes history and projection (DRHP p.166).

The part that is addressable: the report names waste collection and handling, municipal cleaning, sewer and drain cleaning and specialised environmental equipment as the company's addressable segments, sold mainly to urban local bodies, municipal corporations, government institutions and waste contractors (DRHP p.160).

For these it gives category markets: India's dust suppression systems market at USD 430 million in 2020, the drain cleaning equipment market at USD 86 million in 2021 and the road and street sweeping market at USD 74.7 million in 2021 (DRHP p.173, DRHP p.176, DRHP p.183). It sizes the sewer and drain cleaning service market, of which the municipal part was USD 28.3 million in 2024 (DRHP p.176).

What the company is today: FY26 revenue of ₹63.0 crore (DRHP p.80). The report gives no market share for the company, and with the markets in dollars and no conversion rate in the document, the company's revenue cannot be set against them here.

Size over time: the commissioned report projects the air pollution control market from USD 8.5 billion in 2020 to USD 15.7 billion by 2030, after 5.0% a year in 2020 to 2024 and 7.5% a year from 2025 (DRHP p.172).

It projects dust suppression to USD 790 million by 2030 (DRHP p.173), liquid waste management from USD 7.7 billion in 2020 to USD 13.0 billion by 2030 (DRHP p.174), sewer and drain cleaning services from USD 118 million in 2021 to USD 246 million by 2031 (DRHP p.175), drain cleaning equipment to USD 282 million by 2031 (DRHP p.176), road and street sweeping to USD 119.7 million by 2030 (DRHP p.183), and material handling equipment from USD 2.0 billion in 2020 to USD 4.1 billion by 2030 (DRHP p.185).

These are the report's claims, built from third-party databases, not figures from the company's accounts. On waste itself, India's municipal waste generation rose from 1,01,066 tonnes a day in FY16 to 1,70,939 tonnes a day in FY23, while collection coverage went from 86% to 96% and treatment from 20% to 61% of waste generated (DRHP p.179).

Segments: the report divides the industry by source of waste (household, industrial, commercial), type of waste (solid, liquid, hazardous, specialised, residual), level of automation, equipment type and end user (DRHP p.158). The company sits in mobile, semi-automated municipal equipment for solid and liquid waste, with air pollution equipment and utility vehicles alongside (DRHP p.158, DRHP p.166).

What drives demand: the chapter names urbanisation, with urban population rising from 43.22 crore in 2015 to 52.24 crore in 2025 (DRHP p.164); the number of urban local bodies, up from 3,939 in FY14 to 4,641 in FY23, with Uttar Pradesh the largest at 734 (DRHP p.163); Union grants to urban local bodies of ₹12,594 crore in FY18, ₹26,023 crore in FY26 (revised) and ₹45,272 crore budgeted for FY27 (DRHP p.163); and central schemes.

Swachh Bharat Mission Urban 2.0 has an outlay of about ₹1,42,000 crore, and its approved plans cover 580 mechanical road sweepers costing about ₹323 crore in 113 cities under the National Clean Air Programme (DRHP p.192). AMRUT 2.0, for water and sewerage, has an outlay of about ₹2,99,000 crore (DRHP p.191). Union spending on drinking water and sanitation rose from about ₹16,000 crore in FY21 to a budgeted ₹74,900 crore in FY27 (DRHP p.183).

Structure: the report calls the market a business-to-government and business-to-business, infrastructure-linked equipment market (DRHP p.170). It rates buyer power as high, because municipalities compare suppliers through tenders, and rivalry as moderate to high, competing on price, quality, customisation, execution and after-sales service (DRHP p.190). It expects the industry to stay fragmented (DRHP p.199). Named competitors are TPS Infrastructure Limited, Nature Green Tools & Machine Private Limited, Kam-Avida Enviro Engineers Pvt Ltd, Ensol Multiclean Equipment Private Limited and Cloud Tech Private Limited among equipment makers, and Antony Waste Handling Cell Ltd. and Urban Enviro Waste Management among service providers (DRHP p.195, DRHP p.196). No market shares are given.

Inputs and trade: the inputs are steel sheets and sections, hydraulic cylinders and pumps, motors, batteries, control electronics and commercial vehicle chassis (DRHP p.161). The report lists dependence on chassis and key raw materials among the company's weaknesses (DRHP p.198). The company buys only in India; it imported ₹0.49 crore of materials in FY25 and none in FY26 (DRHP p.43). It exports nothing (DRHP p.57).

Rules: the chapter lists the Solid Waste Management Rules effective April 1, 2026, which require four-way segregation at source and online waste tracking (DRHP p.165), the Construction and Demolition Waste Management Rules effective April 2026, end-of-life vehicle and BS-VI emission rules, and the GeM and Make in India preference for local suppliers (DRHP p.194). The company's own factory needs a pollution consent to operate, a factory licence and a fire no-objection certificate; it holds only a provisional fire certificate and has not applied for the final one (DRHP p.350, DRHP p.355).

What the chapter says can go wrong: high upfront equipment cost for small municipalities; dependence on municipal budgets, tenders and approvals, with long project cycles and late payment; price pressure in tenders, which the report says pushes customers to choose on upfront cost; poor waste segregation; skill gaps; and the cost of building a service network (DRHP p.189). Scheme funding is uneven year to year: AMRUT funding fell from ₹13,868 crore in FY22 to about ₹5,500 crore in FY24 and FY25 before a budgeted ₹8,000 crore in FY27 (DRHP p.191).

15Competitive position

Quality Enviro Engineers competitors

Source: DRHP p.196, figures as the commissioned report prints them. The report also compares two service providers: Antony Waste Handling Cell Ltd., FY26 sales ₹640.5 crore with a 1.78% net margin, and Urban Enviro Waste Management, FY26 sales ₹182.1 crore with an 8.17% net margin (DRHP p.197). Antony's FY26 sales are printed as up 1,720.81% from ₹35.2 crore, a figure the report does not explain (DRHP p.196). The report does not give RoCE or borrowings in rupees for these companies.

What the company puts forward: experience with government tenders, a range of products in several configurations, in-house fabrication, after-sales service, and recognition as the GeM maker of 28 products (DRHP p.135, DRHP p.201).

Against that: tenders are won about one time in sixteen, 55 of 884 in FY26 (DRHP p.139); the report rates buyer power as high (DRHP p.190); there is one factory (DRHP p.47); one trademark application is under objection and one patent application was refused earlier (DRHP p.62); and staff attrition was 50.00% in FY26 (DRHP p.56). Revenue is smaller than every named equipment peer except Cloud Tech (DRHP p.196).

Ashwani Srivastava previously worked at Kam-Avida, and Devendra Singh at TPS Infrastructure, both named competitors (DRHP p.254).

16Peers the company named

Peers named in the offer document: none. The basis for issue price states that no listed company in India is comparable in business, size and scale, so no industry P/E or peer table is given (DRHP p.136).

The only comparison is the commissioned report's, set out in section 14, which mixes unlisted private companies with Antony Waste Handling Cell Ltd. and is printed on years that do not all match (DRHP p.196). The company's FY26 EPS is ₹3.88 on the post-bonus share count and its net asset value ₹25.16 a share (DRHP p.137). With no price band, no P/E can be stated.

17Risks, in plain words

Quality Enviro Engineers IPO risks

Financial: cash and working capital: inventory of ₹14.4 crore at March 2026, two thirds work in progress, and receivables of ₹33.6 crore, 195 days of revenue (DRHP p.42, DRHP p.40) → profit is not arriving as cash, and the company plans to fund more working capital from the issue → operating cash flow was −₹8.8 crore in FY25 and −₹1.7 crore in FY26 (DRHP p.81).

Financial: profit quality: FY26 other income of ₹1.8 crore included ₹0.70 crore of balances written back, and was 25.3% of profit before tax (DRHP p.308, our arithmetic, DRHP p.80) → part of the FY26 profit does not come from selling equipment or services.

Financial: debt after the balance sheet: borrowings of ₹12.7 crore at March 2026 rose to at least ₹18.8 crore with HDFC Bank by September 5, 2026, mostly an overdraft repayable on demand (DRHP p.79, DRHP p.129) → the ₹8.0 crore repayment object covers less than half of that (DRHP p.118).

Customers: the top ten customers were 54.92% of FY26 revenue and the largest 14.62% (DRHP p.44) → there are no long-term contracts and repeat customers brought 45.28% of FY26 revenue against 72.02% in FY24 (DRHP p.44, DRHP p.139).

Customers: government tenders: 38.57% of FY26 revenue came from government bodies (DRHP p.45) → orders depend on tenders, of which the company won 6.22% in FY26, and on government payment cycles; ₹0.83 crore from Kanpur Nagar Nigam has been unpaid for more than three years (DRHP p.139, DRHP p.40).

Promoters: related parties: sales to the promoter Neha Srivastava's firm were 22.00% of FY24 revenue, and ₹7.7 crore was routed through Ashwani Srivastava's account in FY26 (DRHP p.48, DRHP p.85) → the non-compete with the firm was signed only on the filing date (DRHP p.60).

Regulation and compliance: the factory operated for almost six months without a valid consent to operate in 2026, and has only a provisional fire certificate, with no application made for the final one (DRHP p.62, DRHP p.52) → the regulator may act for the gap period, and the company names no amount (DRHP p.62). TDS returns for the first three quarters of FY26 and of FY24 were not filed, and 10 GST return delays in FY24 involved ₹4.7 crore (DRHP p.51, DRHP p.50).

Insurance: only ₹0.24 crore of assets, 0.32% of the total, were insured at March 31, 2026, the company's vehicles (DRHP p.59) → a loss at the factory would fall on the company, though the business chapter lists a ₹15.7 crore building and stock policy expiring May 8, 2027 (DRHP p.234).

Issue-specific: promoters' average cost is ₹0.91 a share, and the last cash placement was at ₹551.20 before the 10:1 bonus, about ₹50.11 after it (DRHP p.66, DRHP p.100, our arithmetic) → the objects are management estimates, not appraised, with no monitoring agency (DRHP p.133).

18Litigation and regulatory matters

Cases against Quality Enviro Engineers and its promoters

By the company: mediation against Kanpur Nagar Nigam claiming ₹0.81 crore with 24% interest for machinery supplied (DRHP p.344). Regulatory: no actions by statutory or regulatory authorities against the company or promoters (DRHP p.343, DRHP p.344), and no SEBI or stock exchange action against the promoters (DRHP p.53).

The Registrar of Companies imposed penalties on July 10, 2026: ₹50,000 each on the company and officers over a December 2020 rights issue filing, and ₹2 lakh, about ₹0.02 crore, on the company and ₹1 lakh each on Ashwani Srivastava, Rajiv Kumar and Devendra Singh over the May 2024 placement money (DRHP p.52). Tax: Devendra Singh has one direct tax matter of below ₹0.01 crore (DRHP p.346).

Contingent tax demands stood at ₹0.69 crore at March 2026, against ₹3.1 crore at March 2024 (DRHP p.82). A GST demand of ₹0.07 crore still shows on the GST portal though the company says it was waived under the amnesty scheme (DRHP p.83). The company secretary, Deepti, is the complainant in two criminal cases of a personal nature (DRHP p.346).

19Related-party transactions

Source: DRHP p.84, DRHP p.85, converted from ₹ lakh. Rajiv Kumar was paid ₹0.10 crore a year and Devendra Singh ₹0.09 crore a year in each of the three years; Neha Srivastava ₹0.05 crore in FY24 (DRHP p.84). Reimbursements paid to Rajiv Kumar on the company's behalf were ₹0.90 crore in FY24 (DRHP p.85). Loans from Neha Srivastava of ₹0.11 crore were repaid in FY25 (DRHP p.85).

At March 31, 2026 the company owed Green India Envoiro & Infrustructure ₹1.1 crore in trade payables and was owed ₹0.36 crore; at March 31, 2025 the figures were ₹3.3 crore owed and ₹2.4 crore receivable (DRHP p.85).

What appeared or changed in the two years before filing: sales to Green India Envoiro & Infrustructure fell from ₹8.9 crore in FY24 to ₹0.28 crore in FY26, while purchases of goods and services from it of ₹4.4 crore appeared in FY25 and stopped in FY26 (DRHP p.84); the non-compete agreement was signed on September 30, 2026 (DRHP p.251); director pay was reset from August 14, 2026 (DRHP p.257).

20What the offer document does not say

Customers and suppliers are not named. Prices per machine, units sold and margins by product, service and trading line are not given, so the growth cannot be split into volume and price. The purpose of the money routed through the promoter's account is not explained (DRHP p.85). The issue size in rupees, the price band, the general corporate purposes amount and issue expenses are blank (DRHP p.118).

The after-issue shareholding and capitalisation are blank (DRHP p.112, DRHP p.342). No balance sheet after March 2026 is given, though borrowings rose after it (DRHP p.129). The commissioned report gives no size for the company's own municipal equipment market and no market shares. How Mittal Growth Partners LLP acquired its shares is not stated.

Some inconsistencies are recorded as document matters, not business ones: the MD&A says the business is not seasonal while Q4 brought 42.57% of FY26 revenue and 52.97% of FY25 revenue (DRHP p.340, DRHP p.121); it says the business is not dependent on a few customers while the top ten are 54.92% (DRHP p.340, DRHP p.44); the risk factor summary counts 9 tax cases against the company and the litigation chapter 10 (DRHP p.53, DRHP p.346);

the litigation chapter calls Devendra Singh an independent director while the board lists that director as whole-time (DRHP p.345, DRHP p.252); the insurance risk factor says only vehicles were insured in FY26 while the business chapter lists a ₹15.7 crore building policy (DRHP p.59, DRHP p.234); the commissioned report says the company was set up in 2014 against incorporation in 2016 (DRHP p.195, DRHP p.2);

the consent letter from B2K Analytics is dated September 24, 2026, four days before the report it covers (DRHP p.463); EBIT is printed above EBITDA because one includes other income and the other does not (DRHP p.137); and Enprotech Eco Machines Private Limited is listed in the promoter group though the promoter's shares in it were transferred in December 2024 (DRHP p.275, DRHP p.273).

21Five questions for management

1. What were the FY26 margins on manufactured products, services and trading separately, and how much of the ₹17.8 crore rise in service revenue since FY24 came from the MCD water sprinkler contracts?
2. Which orders make up the ₹9.5 crore of work in progress at March 31, 2026, and how much of it had been billed by September 2026?
3. What were the ₹7.7 crore of funds routed through Ashwani Srivastava's account in FY26, and why did the company use that route?
4. Why does the company hold ₹10.9 crore of long fixed deposits while drawing ₹17.5 crore on an overdraft, and what interest is earned against what is paid?
5. How many machines were sold in each category in FY24 to FY26, and at what average price, and why did solid waste equipment fall from 705 units to 267?

1Sources and cited facts

This study was read from 1 document the company filed. The 208 figures it cites are listed under the document each came from, with the page and the sentence as printed.