From toilets to IPO – Banka Bioloo charts 10X growth

Banka Bioloo IPO opens on Monday and we got in touch with Namita Banka – the force behind the company – for an insiders’ view of the company’s business and its prospects. One can find more details about the SME IPO on this page. Here are some quick points about the challenges Namita faced and how she overcame and evolved the business. Namita also talks about the company’s aggressive expansion plans and how the company is poised for big growth in the next five years.

IPO Central – Could you please tell us about yourself and how you stumbled upon the idea of bio-toilets?

Namita Banka – I started Banka in 2008 but it has been almost 17 years that I’m in business. That was in 1999 that I started with a diamond jewellery business in Surat (Gujarat). I set up a manufacturing unit for customized jewellery and got my brother involved in operations. In 2008, my husband moved to Hyderabad and I followed him six months later after handing over the jewellery business to my brother. I didn’t want to start again in jewellery trade as lot of transactions happen in cash.

So I started with solid waste management and took a franchise. The concept of recycling of cartridges was new and exciting but the company backed out and I had to close the business within six months. This was followed by a six month NGO course from CSIM (Center for Social Initiative Management) in 2009 and that brought a total change in my life. After the course, I approached railways and became the liaisoning and business development agent for the toilet company which was building toilets. Couple of years down the line, I moved from being a liaisoning agent and started manufacturing my own product.

How easy or difficult was it to get your first contract?

Getting my first contract was a little difficult. Railways had already toyed with the idea of bio-toilets in 2008 and I knew about it but being a small company, we couldn’t supply them so I started providing maintenance services for these toilets. I got my first contract for maintenance in 2011 for green toilets. As of now, we are the only one to do this in India. Getting additional business has been relatively easy. From a single contract of INR55 lakhs, we have expanded our annual business with railways to INR9-10 crore.

What is the revenue split of Banka Bioloo?

The revenue split is almost 50:50 between services and manufacturing with some variations quarter to quarter. Both our business lines are growing together. In operations and maintenance, we will be doing around INR80-85 crore annually and manufacturing contributing nearly INR70 crore. So total, we may be able to see INR150 crore in the next five years.

That’s quite a steep jump from INR15 crore in FY2017

Yes, we haven’t had working capital infusion in recent years. Majority of the money that we will have from the IPO will go towards working capital.  Since the developmental work is over, not much investment is required as setup costs are over. From here, we should be able to grow in multiples. We are targeting INR30 crore in FY ending in March 2019.

In 2012, we started with INR1 crore and then we had some capital infusion from family and friends and we immediately did a turnover of INR5 crore. In the next year, we did INR9 crore but then fell short of funds so couldn’t go beyond INR9 crore. Then we had another round of capital infusion of INR1.25 crore from HNIs and immediately went to INR15 crore.

PS: These are combined figures for Banka Enterprises and Banka Bioloo and are different from the numbers presented elsewhere on our website.

Where is the next phase of growth coming from?

The business with railways started in 2012 and we have grown several times since then. We will keep growing this way for the next five years. There are no major players looking at it. By 2020/21, complete installation will take place. Till that time, no major supplier is going to come and by that time, we will already be 7-8 years in operations & maintenance. Our rates are also competitive. When I expand to non-railway partners, the industry is huge (The company already does business with L&T, Shapoorji Pallonji, and Piramal Realty to name a few).

The biggest growth option I see is replacement of septic tank with bio-tank technology. That has to happen because septic tank is very old technology. The bio-digester technology is cheaper and cost effective and has several advantages over septic tanks. It is easy and safe, requires smaller space and construction time is very less.