This company manages nearly 90% of Mumbai's municipal waste

India is among the world’s top 10 MSW generating countries. According to a report in 2023 by The Energy and Resources Institute, India generates over 62 million tonnes of waste in a year. The United Nations Environment Programme (UNEP) estimates MSW generation to hit 3.8 billion tonnes by 2050, from 2.3 billion tonnes in 2023. The hazard is not limited to environment and climate alone; globally, waste management directly cost $361 billion in 2020. Without urgent action, by 2050, this cost could almost double to $640.3 billion.

A 2022 World Bank report predicts that waste generation will drastically outpace population growth by more than double by 2050. One of the ways in which this can be curbed is by waste management.

 

Starting Up

Antony Waste was started in a garage, literally. In the 1960s, Jacob Ouseph and his brothers (Antony Ouseph, the late John Ouseph, Poulose, Thomas Ouseph) moved from Thrissur in Kerala to Mumbai to start an automobile workshop at Masjid Bunder, specialising in heavy vehicles. Building the body over the chassi required skilled technicians, and the brothers fit the bill. From repair, they quickly moved to making specialised vehicles like aircraft refuellers, fire engines, and double-decker buses for Brihanmumbai Municipal Corporation (BMC).

The brothers launched Antony Garages in the MIDC zone of Navi Mumbai in 1983, followed by Antony Motors in 1992, setting up a large facility in Mumbai’s Patalganga. Later, Antony Garages diversified into a service division, supplying buses and forming Antony Road Transport Solutions. The company secured long-term government contracts to provide buses in Delhi and Pune. Another of its ventures was an automobile dealership under the Ashok Leyland brand, with outlets in Taloja and Bhiwandi, on the outskirts of the city.

“A reputation for quality made them a trusted partner for government agencies and urban local bodies across India, including clients like BEST [Brihanmumbai Electricity Supply and Transport, Mumbai’s public transport service and electricity provider] and the Delhi Transport Authority,” says Jose Jacob Kallarakal, founder, chairman, and managing director, Antony Waste Handling Cell (AWHC). Jose is Jacob Ouseph’s son and joined the business in the 1990s.

During this time, the world was waking up to the hazards of solid waste management and felt the need to take urgent action. The Antony group saw an opportunity in waste management solutions, and their earlier contracts, reputation with municipal corporations, and technical automotive skills came handy.

“Soon the portfolio expanded to include innovative waste compactors for municipal corporations in the 1990s,” says Jose. “Travelling abroad, I realised garbage is an issue in India and wanted to explore solutions in managing that. Waste compactors that we built helped to some extent.” A compactor compresses and reduces a variety of materials through hydraulic, mechanical, or pneumatic force.

As municipal corporations moved beyond traditional product sales to service-oriented processes, they approached the Antony group with what Jose calls a “groundbreaking proposition”. The proposal was to offer waste compactors not just as equipment but as a complete solution, including a service agreement. “This marked the birth of AWHC in 2001, a pioneering initiative that revolutionised the waste management landscape,” Jose says, beaming with pride. In 2001, AWHC bagged its first contract from BMC for road sweeping. “It was just the seed of what later turned into AWHC.”

A mechanical engineer from Mumbai’s Bharati Vidyapeeth’s College of Engineering, Jose was joined by his brother Shiju Jacob Kallarakal in AWHC, who is executive director and chief risk officer.

AWHC was family-owned until 2007, when private equity (PE) investor Elliott Management Corp acquired a stake in it through its investment vehicle. This investment was followed by a second tranche in May 2014, increasing the world’s largest activist hedge fund ownership in AWHC to 50.6 percent. Elliott, which manages about $65.5 billion in assets, subsequently exited its investment, primarily through the AWHC’s initial public offering (IPO) in 2020 and secondary sales. 

Also read: Vani Murthy: Building a sustainable, low-waste army

 

The company’s waste-to-energy plant in Pimpri Chinchwad, Pune, that converts non-recyclable waste to clean and renewable energy Image: Courtesy Antony Waste

Sum Of Its Parts

Collection and transportation (C&T), and waste processing are primary segments AWHC operates in. “While C&T generates the majority of revenue, it also requires significant working capital due to operational demands and management of multiple clients. Waste processing, with a smaller client base, has lower working capital requirements,” says Subramanian NG, group chief financial officer.

The company claims to operate Asia’s largest single location waste processing plant in Mumbai’s Kanjurmarg and that it processes nearly 90 percent of the waste generated in Mumbai.

The company’s primary costs include infrastructure development, equipment procurement and maintenance, employee salaries, and waste processing expenses. It also incurs expenses related to compliance with environmental regulations and safety standards. Revenue generation is through long-term contracts with clients, sale of compost and recycled products.

Antony Waste operates within a few primary service categories such as a) waste collection and transportation b) mechanised and non-mechanised sweeping c) waste processing and treatment d) waste to energy e) construction and demolition waste management.  

For its C&T business, the AWHC uses waste compactor vehicles with a capacity of six to 14 tonnes per trip, significantly more than the one to two tonnes of traditional open dumpers. “This translates to fewer trips, reduced fuel consumption, and lower carbon emissions,” says Subramanian. Fuel and labour are AWHC’s two primary cost components. Its average tipping fee in the C&T business was ₹2,042 per tonne in FY23, with an average price escalation of 7.6 percent, based on the previous 12-month’s fuel, labour, and other inflation-induced component swings. A tipping fee or a gate fee is paid by anyone who disposes waste in a landfill.

The company’s fleet includes over 2,300 vehicles dedicated to collecting 2.46 million tonnes of waste annually. Of these, 2,200 vehicles are equipped with GPS technology, enabling real-time tracking and operational efficiency. “This allows for immediate responses to waste disposal alerts and optimises route planning,” says Shiju.

AWHC also uses RFID technology to tag waste bins, while collection vehicles are equipped with RFID readers. This provides real-time data on bin collection, ensuring accurate tracking and monitoring. Geo-fencing further enhances the process by integrating location data with waste collection activities, he explains. In its sweeping business segment, it covers more than 670 km a day.

In the waste processing and treatment business, recyclable materials are separated at material recovery facilities (MRF) using manual labour and automated sorting processes. Recovered materials are then processed and sold for recycling.

“Controlled amounts of liquid and air are introduced into bio-reactor landfills to accelerate organic waste decomposition. This reduces waste volume and generates biogas for power generation,” says Jose. Methane and other gases produced at landfills are captured, processed and converted into electricity or heat, mitigating greenhouse gas emissions. Organic wastes like food scraps and yard waste undergo aerobic decomposition in composting facilities, resulting in nutrient-rich compost for agriculture and landscaping.

“Bio-mining is the process of cleaning open dump sites by separating the waste into its constituent parts, converting the biodegradable portion into compost, methane gas or biodiesel, and using non-recyclable plastic for alternative fuels in industries,” adds Jose. The Solid Waste Management Rules, 2016, mandate bio-mining of legacy waste instead of ‘capping’, which means covering the waste with soil. Sanitary and packaging wastes must be disposed of by the producer and these regulations, which focus on separating waste at the source, also cover user expenses for collection, disposal and processing from bulk generators. The company’s recently launched waste-to-energy (WTE) plant in Pimpri Chinchwad converts non-recyclable waste to clean and renewable energy.

Jose says the customised integrated waste technology manages diverse categories of waste, with a specially designed drying zone on the grate, ensuring efficient and uniform combustion by eliminating excess moisture. “We have constructed a state-of-the-art facility to process 1,000 TPD of MSW, including recovery of recyclable materials and conversion of wet waste into compost,” he adds. About 700 TPD of non-recyclable waste is processed at the WTE plant, generating 14 MW of power through controlled incineration meeting all emission standards. Its closed-loop water system uses recycled water from the Chikali sewage treatment plant (STP), eliminating the need for fresh water.

Its construction and demolition (C&D) waste management uses screeners, crushers and separators. Concrete, bricks, wood and metals are segregated, crushed and sorted, and reused in construction projects or sold as raw materials. Currently, the company has 24 ongoing projects in nine states.

The company’s mechanical road-sweeping machine in Pune

 

Money Matters

The C&T segment has contributed around 60 percent to AWHC’s revenue in the past five fiscal years. “This is attributed to the higher volume of C&T projects secured, compared to the smaller number, but larger scale, waste processing contracts,” says Subramanian.

The company closed FY24 with a net profit of ₹99.9 crore, growing 18 percent year-on-year from ₹84.6 crore the previous year, and a profit margin increase of 11 percent. Its revenue in FY24 was ₹896.4 crore, growing a mere 2 percent from ₹875.2 crore in the previous year.

“Our momentum remains robust, with sales of refuse-derived fuel [RDF] reaching 42,000 tonnes in the last quarter. Throughout FY24, AWHC shipped 145,720 tonnes of RDF to cement companies, reinforcing circularity principles and aiding its clients in fulfilling their alternative fuel requirement objectives,” Jose says. RDF is produced from combustible components or MSW—usually taken from industrial or commercial sites—and is shred, dried, baled and then finally burnt to produce electricity. In FY24, AWHC handled 4.66 million metric tonnes of waste, 1.47 lakh tonnes of RFD and sold 9,973 tonnes of compost.

However, its debt is also mounting. As of March 2024, the company’s net debt was ₹323 crore, indicating net debt to equity of around 0.5 times. Its net debt has increased from ₹298 crore in FY23. Term loans (project) take a major chunk of its loan profile, with ₹263.7 crore in FY24 from ₹228.1 crore in FY23.

According to Ambar Taneja, CIO, Cirque India Equity Fund, AWHC’s core business of waste management and recycling is the need of the hour, especially in India. “I like its business and revenue model. As countries are moving towards circular economies, minimising the lifecycle of waste, recycling and reusing, Antony’s business is here to stay.”

However, Taneja is a bit concerned about AWHC’s scalability and earnings margins. “The company needs to update its dividend policy as there are many foreign funds that do stock picking based on dividends. Being in the sustainability business, its prospects look attractive at a time when investments are turning green and more ESG focussed.”

The ride hasn’t been easy, with challenges stemming from regulatory requirements to getting finances for its projects due to the nature of business. “One of the foremost challenges was navigating the regulatory environment, which was often unfavourable to operators. Waste management contracts were predominantly tender-based, and their terms were far from operator-friendly,” says Jose.

Contracts lacked cost-escalation provisions, forcing the company to absorb rising labour and fuel costs. The absence of arbitration clauses complicated dispute resolution, while vague performance terms led to inconsistencies. Additionally, the frequently changing scope of work due to new directives resulted in unplanned costs. “Over time, these regulatory issues were addressed, leading to more balanced and operator-friendly contract terms,” he adds.

Besides, prejudices associated with waste management posed additional challenges for AWHC, which faced difficulties related to financing, manpower and industry perception. “Financing was particularly challenging, as the banking industry initially lacked a robust risk appraisal mechanism for specialised waste management equipment like compactors,” recalls Subramanian.

That forced AWHC to rely on non-banking financial options, which came with higher interest rates and increased the cost of debt. Additionally, finding skilled manpower was tough. The specialised hydraulic systems in waste compactors required trained technicians who could operate under the harsh conditions typical of waste management.

Also read: GPS Renewables: Converting waste to bioenergy, the tech way

A GPS-enabled waste-collection compactor in Nashik

Road to IPO

Typically, primary markets in India are accommodating, with most issues getting full subscriptions. However, AWHC’s first IPO attempt in March 2020 failed. As the world was grappling with the Covid-19 epidemic, AWHC’s IPO to raise ₹206 crore failed to garner subscriptions and was subsequently withdrawn from the public markets.

The company tried its luck again in December 2020, but with a higher fund raise mandate of ₹300 crore. As the markets were already flourishing with abundant liquidity and it was heyday for new listings, AWHC’s issue was subscribed 15 times in the price band of ₹313 to ₹315. The shares debuted on stock exchanges on January 1, 2021, at a 38 percent premium of ₹436. The stock has been steady with bouts of selling pressure in 2023. In a year, the stock has risen over 70 percent. Jose explains the success.

“The company overcame initial scepticism from some investors and delivered impressive financial results, exceeding expectations. AWHC maintained uninterrupted operations during the challenging period of the pandemic, demonstrating the non-cyclical nature of its business model. Revenue streams were stable, and client payments were consistent, indicating the business’s capacity to cope with external shocks and operate efficiently even during times of crisis,” he says.

Out of the total IPO proceeds of ₹300 crore, ₹215 crore was allocated for offer-for-sale (OFS) portion. The remaining ₹85 crore was utilised to partly finance the WTE business. A portion of the proceeds was also used to infuse debt into AG Enviro (a subsidiary) for the repayment or pre-payment of a part of their outstanding borrowings, thereby reducing the consolidated debt of the company and its subsidiaries. A limited portion of the funds was allocated for general corporate purposes.

“Financially, the IPO has broadened the company’s access to funding, moving beyond reliance on projects and vehicle-financing. This financial diversification enables AWHC to undertake larger, more impactful projects. Moreover, the improved financial standing and public recognition have enhanced the company’s ability to attract top-tier talent,” says Jose.

Waste segregation in process at the Kanjurmarg plant

What Next?

The company aims to make a strong presence in the WTE sector by investing in advanced technologies. “We plan to convert more waste into usable energy, reducing landfill waste and our environmental footprint,” says Shiju.

Another focus is expanding in non-municipality businesses. “By diversifying into industrial, commercial, and institutional waste management, we aim to broaden our client base and reduce dependence on municipal contracts, ensuring a stable revenue stream and fostering growth,” Jose adds.

AWHC also plans to diversify into underserved areas such as vehicle and tyre scrapping, solar panel recycling, and battery scrapping, providing solutions. The company is already engaging with cement companies to secure long-term sale contracts for RDF and collaborating with fertiliser companies to deliver compost.