Introduction

In 2008, as environmental concerns loomed larger, India witnessed the dawn of a new era in waste management. This was when Organic Recycling Systems Limited (ORS) emerged as a pioneer, dedicated to providing innovative, sustainable solutions for waste management. Fast forward almost two decades and ORS stands tall as a forerunner in transforming waste into valuable resources.

Origins of ORS

The roots of ORS can be traced back to a time when waste management in India was transitioning into a viable, large-scale industry. The Indian government established the initial guidelines and regulations for municipal sewage waste (MSW) processing. Amid growing environmental pollution, a visionary individual embarked on a mission to explore technology-driven solutions for responsible MSW treatment. What set this endeavor apart was the unwavering commitment to turning waste into a valuable resource.

A Unique Approach

ORS recognized that not all waste fractions could be efficiently processed using a one-size-fits-all approach. Instead, they believed that each waste fraction deserved a tailored solution. This philosophy laid the foundation for ORS’s journey in the waste management sector.

Setting New Standards

In 2013, ORS achieved a remarkable milestone by establishing India’s first large-scale MSW processing plant in Solapur. What set this plant apart was its groundbreaking ability to segregate waste into organic and inorganic fractions. The organic waste underwent a transformation through ORS’s proprietary DRYAD™ technology. This innovative process, based on thermophilic biomethanation, converted organic waste into biogas and fertilizers. Today, the Solapur Plant boasts the capacity to process a staggering 400 tonnes of waste per day (TPD) and generates 3.60 MW of electricity using biogas. Additionally, it produces 60-80 tonnes of fertilizers daily, showcasing ORS’s commitment to resource optimization.

A Decade of Innovation

Over the past ten years, ORS has been at the forefront of numerous waste management and processing projects, each with its unique technological demands. Drawing from their extensive operational experience in the sector, ORS has developed cutting-edge MSW processing technologies. These advancements not only increase profitability for stakeholders but also significantly reduce the environmental footprint of waste management.

Organic Recycling Systems Limited, incorporated in 2008, is an engineering company specializing in sustainable waste management solutions. The company operates in three main business verticals and provides a range of services in the waste management sector. Here’s an overview of the key information provided:

Business Verticals

1. Build Own Operate Transfer (BOOT) Model: This business model likely involves the company building and operating waste management facilities, then transferring them to the relevant authorities or clients.
2. Engineering Procurement and Commissioning (EPC) Model: EPC services typically involve the design, procurement, and construction of waste management projects.
3. Supply of Key Equipment: The company may also supply essential equipment needed for waste management solutions.

Services Offered

• EPC Services in Waste Management.
• Commissioning Services.
• Consulting and Advisory Services in the Waste Management Sector.
• Planning, Building, and Managing Waste Management Projects.
• Laboratory Services and more.

For investors considering opportunities in the waste management sector, a comprehensive understanding of a company’s financial performance and potential risks and strengths is paramount. In this article, we delve into the financials of Organic Recycling Systems Limited (ORS) and provide insights to assist in informed investment decisions.

Financial Highlights:

Here’s a snapshot of ORS’s financial performance over the past three fiscal years:

Strengths:

1. Pioneering Technology: ORS has established itself as a pioneer in India by introducing the thermophilic anaerobic biomethanation technique for managing municipal solid waste. This innovative approach has the potential to revolutionize waste management in the country.
2. Diversified Business Verticals: The company’s expansion into multiple verticals has been a key driver of revenue growth. This diversification enhances its resilience and ability to capture a broader market share.
3. Future Growth Prospects: ORS’s strategic vision includes bidding for direct Engineering Procurement and Construction (EPC) opportunities through public tenders. This aligns with government initiatives such as the Sustainable Alternative Towards Affordable Transportation (SATAT) Guidelines, indicating a promising avenue for future growth.

Risks:

1. Negative Cash Flow Projection: The company anticipates generating negative cash flow in the future. This projection could potentially increase the debt profile of the business, which is a concern for investors.
2. Customer Dependency: ORS heavily depends on a limited number of customers for a significant portion of its revenue. The loss of any major customers could have a notable impact on the company’s operational performance and financial stability.
3. Legal Proceedings: The company, its subsidiaries, directors

Market Potential

• The dry waste recycling sector has the potential to generate approximately ₹11,836 crores per annum, as per analysis by the Ministry of Housing and Urban Affairs (MoHUA).
• The company has a significant focus on solid waste management (SWM), and government initiatives such as SWM Rules 2016, Biomedical Waste Management Rules 2016, Plastic Waste Management 2016, etc., indicate opportunities for business growth in this sector.

IPO Overview

• Fresh Issue: The IPO consists entirely of fresh issues, aiming to raise ₹50.00 crores. This offering will aggregate up to 25,00,200 shares.
• Listing Date: Organic Recycling Systems Limited’s IPO is scheduled to debut on both the BSE SME and NSE exchanges on October 05, 2023.

Pricing Information:

• IPO Price: Each share in the IPO has been priced at ₹200.

Lot Size and Minimum Investment:

• Lot Size: The IPO lot size for Organic Recycling Systems Limited is 600 shares.
• Minimum Investment: To participate in this IPO, investors will need to make a minimum investment of ₹1,20,000.

IPO Objectives:

The proceeds from the IPO will be channeled for the following purposes:

1. Repayment of Debt: A portion of the funds raised will be utilized to repay existing debt, potentially improving the company’s financial position.
2. General Corporate Purposes and Issue Expenses: The remainder of the funds will be allocated for general corporate purposes and covering the expenses associated with the IPO.

Peer Comparison:

Interestingly, Organic Recycling Systems Limited, as stated in its Draft Red Herring Prospectus (DRHP), does not have any listed peers in the market. This unique position in the industry highlights the company’s distinct approach to waste management and the potential for growth without direct competition.

As the IPO date approaches, investors and enthusiasts alike are eagerly anticipating the debut of Organic Recycling Systems Limited on the stock exchanges. It presents an opportunity to support a company dedicated to sustainable waste management while potentially benefiting from the growth prospects of the industry. However, as with any investment, it’s essential to conduct thorough due diligence and consider your financial objectives before participating in the IPO.