When Joe Biden took the oath of office as the 46th President of the United States in January this year, little did the founder of Indore-based carbon credit consultancy firm EKI Energy Services know that his fortunes were going to swell. On assuming office, President Biden revoked his predecessor Donald Trump’s decision to withdraw from the 2015 Paris Accords on climate change. Trump quit the agreement in 2017, claiming that the accord was detrimental to US business interests and economy.
Following Biden’s footsteps to remain committed to the Paris Agreement, a number of corporations across the globe pledged to achieve their climate goals. This resulted in a stock price rally for carbon credit consultancies like EKI Energy Services.
The beginning
Manish Dabkara, 37, had founded carbon credit consultancy firm EnKing International in 2008. Dabkara has a master’s in energy and environment management, and he has worked as an energy auditor with auditing firm SGS and a German government-owned company. For the first seven years after founding the company, Dabkara helped Indian and foreign firms enrol for carbon credits. However, as awareness about the carbon credit market was low, the company did not earn much revenue.
Till 2013, EnKing had worked on 50 greenhouse gas projects and two years later, it won the first government tender of over Rs 1 crore.
"We remained as a consultancy for carbon credits till 2015-16 and realised the customers also need a way to sell them. So, we got into carbon trading on our own and also for our clients," Dabkara told Fortune India.
In 2019 and 2020, EnKing International, now renamed EKI Energy Services, traded over 100 million carbon credits and earned over Rs 100 crore, Dabkara said.
At present, EKI Energy is the largest carbon credit developer and supplier from the developing world, serving over 2,500 corporate customers which are mostly renewable energy companies. Around 70 percent of the company’s projects are from India, while the rest is spread across over 40 countries.
EKI Energy provides consulting, training, energy conservation, carbon credit trading, carbon footprint measurement and management and clean development mechanism and electrical safety audit services.
Stock rally
In 2019-20, EKI Energy Services had reported a revenue of Rs 66 crore and a net profit of Rs 4.4 crore. The company had decided to list on the SME platform of the Bombay Stock Exchange (BSE) in March to raise between Rs 18.24 and Rs 18.60 crore. EKI Energy Services had planned to use the proceeds from its public listing to expand its climate management solutions in India and abroad. In July, EKI Energy Services debuted on the BSE with a market cap of Rs 101.05 crore.
Since its debut, shares of EKI Energy have gained exponentially on the bourses, touching a high of Rs 6,250 on December 3. From Rs 101 crore, EKI Energy's market cap rose to Rs 3,800 crore in December, peaking at Rs 4,146 crore on December 2. The net worth of Dabkara and his family, who own about 74 percent in the company, soared to Rs 2,800 crore.
Also read: Climate Clock: Here's what International Sustainability Standards Board means for investors
“We had not anticipated the current price at the red herring prospectus stage. It was Rs 102 a scrip on the listing day, next day it was Rs 140 and now it is around Rs 6,000,” Business Standard quoted Dabkara as saying. When the story went to print, shares of EKI Energy were trading at Rs 6,400 on the BSE.
The deal
Indore-based EKI Energy Services has inked a deal with Shell Overseas Investments, a unit of Royal Dutch Shell, to develop nature-based solutions for carbon capture in India.
The two companies will set up a joint venture that will work towards conserving and restoring natural ecosystems such as agriculture, grasslands, forests, wetlands, and blue carbon that will lower greenhouse gases in the atmosphere, EKI said in a statement on December 18.
(Edited by : Shoma Bhattacharjee)
First Published: Dec 20, 2021 7:09 PM IST
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