Gurgaon-based Services Company Earthood Services files DRHP for IPO

Gurgaon-based Services Company, Earthood Services Limited, a globally recognized company engaged in certifying environmental attributes primarily providing carbon validation and verification services; and Environmental, Social, and Governance (ESG) advisory and assurance services to customers in India and overseas, has filed its Draft Red Herring Prospectus (DRHP) with the capital markets regulator, the Securities and Exchange Board of India (SEBI) to raise funds through an Initial Public Offering (IPO).

The IPO, with a face value of Rs 10, combines a fresh issue of up to 36 lakh equity shares and an offer for sale of up to 42 lakh equity shares by Promoter Selling Shareholders.

The offer for Sale consists of shareholders selling up to 27.30 lakh equity shares by Dr. Kaviraj Singh and up to 14.70 lakh equity shares by Ashok Kumar Gautam. The offer also includes a subscription reservation by eligible employees, and a discount is being offered to eligible employees bidding in the employee reservation portion.

The company, in consultation with the BRLMS, may consider an issue of specified securities aggregating up to ₹10 crore as a pre-IPO placement. Once the pre-IPO placement is completed, the amount raised under it will be reduced from the fresh issue.

The proceeds from the fresh issue to the extent of Rs 30 crore will be used for funding requirements towards strengthening our technological capabilities through the development, ownership, and commercialization of proprietary DMRV intellectual property and solutions and general corporate purposes.

The Offer is being made through the book-building process, wherein not less than 75% of the net offer is allocated to qualified institutional buyers, and not more than 15% and 35% of the net offer is assigned to non-institutional and retail individual bidders respectively.

Earthood Services Ltd, established in 2012 and promoted by Dr. Kaviraj Singh and Mr. Ashok Kumar Gautam, brings a wealth of expertise to the energy, environment, and climate change sectors, with 17 and 23 years of experience respectively. The company specializes in providing Environmental, Social, and Governance (ESG) advisory and assurance services to clients in India and internationally. Its offerings include lifecycle assessment, sustainability consulting, climate risk assessment, and detailed ESG roadmaps, catering to the growing global demand for reliable and verified ESG solutions.

While its primary focus lies in ESG services, Earthood also provides advisory support for the formation and promotion of Farmer Producer Organisations (FPOs)—entities owned and managed by farmers—which form a smaller part of its operations. Over the years, the company has executed notable projects, such as certifying the Delhi Metro Rail Corporation’s Metro Bhawan as carbon neutral and conducting environmental audits for the Indian Army’s Pulgaon military railway station, providing actionable recommendations to reduce CO2 emissions.

Earthood’s strategic focus aligns with the rising demand for ESG auditing and verification services, driven by investors seeking reliable ESG data and increasing regulatory requirements like the EU Corporate Sustainability Reporting Directive (CSRD), which mandates sustainability reporting and verification for certain companies. This trend underscores the critical role of Earthood’s expertise in verified ESG reporting. (Source: CRISIL Report)

The company’s global footprint spans offices in India, the United Kingdom (UK), Russia, Turkey, and the United Arab Emirates (UAE). Over the last three fiscal years, Earthood has served more than 400 clients across 132 countries, demonstrating steady growth from 89 countries as of March 2022 to 100 in March 2023, and further to 132 by September 2024.

Operationally, Earthood has delivered strong performance, achieving a net margin of 24.79% and an operating EBITDA margin of 39.11% for the six months ending September 30, 2024.

The leadership team is supported by 56 validators and verifiers (as of November 30, 2024), whose sectoral expertise allows the company to manage diverse projects efficiently across its key sectors. To enhance its global capabilities, Earthood has established subsidiaries in the UK (2021), Turkey (2023), and Russia and the UAE (2024). One of these subsidiaries is currently in the process of securing accreditation from the United Kingdom Accreditation System (UKAS), which will further bolster its credibility.

Earthood categorizes its carbon validation and verification services into four core sectors: Renewable Energy, Energy Demand, Forestry and Agriculture, and Waste and Others. Through these specialized services, the company continues to drive impactful solutions that support global sustainability and climate objectives.

The Company’s revenue from operations increased by 44.46% from ₹32.39 crore in Fiscal 2023 to ₹46.79 crore in Fiscal 2024 primarily driven by an increase in sales of Carbon verification and validation services; and validation services. Additionally, ESG Assurance & advisory services and FPO advisory services. Number of projects undertaken rose from 169 in Fiscal 2023 to 219 in Fiscal 2024. Profit after tax increased by 80.11% from ₹10.73 crore in Fiscal 2023 to ₹19.34 crore in Fiscal 2024.

For the six months ended September 30, 2024, revenue from operations stood at Rs 21.89 crore, and Profit after tax stood at Rs 5.43 crore.

Unistone Capital Private Limited is the sole book-running lead manager and Link Intime India Private Limited is the registrar of the issue. The equity shares are proposed to be listed on the National Stock Exchange of India Limited and BSE Limited.