Climate change makes this 37-yr old founder of EKI Energy from Indore a rich entrepreneur

When Indore based EKI Energy Services—with a small revenue of just ₹66 crore and a net profit of ₹4.4 crore in 2019-20—decided to list on the SME platform of the BSE in March, the target was to raise between ₹18.24-₹18.60 crore. It had only ₹6 crore revenues in FY 2018 and ₹ 19 crore in FY 2019. The 12-year-old company wanted to utilise proceeds from the IPO for expanding its climate management solutions in India and abroad and fixed price band for the IPO at ₹100 to ₹102. It debuted on BSE on 4/7/2021 with a market cap of ₹101.05 crore. It was a timely debut and its share prices have been gaining since then. On December 3, its share prices touched a high ₹6250. The 37-year-old Manish Dabkara and his family own nearly 74% stake in the company raising their net worth to ₹ 2800 crore.

On December 15, its share stood at ₹5265—5% higher than the opening price of the day— following the announcement to float a new subsidiary in Dubai. Unconfirmed reports say it is floating a joint venture with oil major Royal Dutch Shell—which may invest $1.6 billion in the JV and create 115 million carbon credits over the next five years. In the last nine months, EKI Energy's market cap increased from ₹101 crore to ₹3800 crore. (It was ₹4146 crore on December 2). Among the 26% stake of public shareholders, Maven India Funds hold a 4.87% stake and Next Orbit Ventures have a 6.27% stake.

While the market cap was growing, so were the revenues for EKI Energy Services that employs about 150 carbon specialists in India and abroad. In 2020-21 it closed with revenues of ₹190 crore and a net profit of ₹18 crore. In the first six months of FY 2022, its revenues soared to ₹636.81 crore with a net profit of ₹117 crore.

"Carbon markets are opening up, in this financial year we are targeting revenues of about ₹1800 crore and at least 50-100% growth in the coming years", says chairman and managing director, Manish Dabkara.

Humble beginnings

EKI Energy is the largest carbon credit developer and supplier from the developing world. It offers end to end solutions in training, consulting, energy conservation, carbon credit trading, Clean Development Mechanism (CDM) and Electrical Safety Audit, Carbon Footprint measurement and management, and many more sustainability services.

It serves over 2500 corporate customers, mostly renewable energy companies, and 70% of the projects are from India. The rest are spread over 40-45 nations, mainly developing countries. "By the size of our team, range of services and expertise, we are the largest carbon consultancy in the developing world. If we look globally, we should now rank among the top five carbon credit companies", says Manish Dabkara.

With a Bachelor's degree in Electrical Engineering and an M.Tech in Energy and Environment Management, he became a certified energy auditor and started his career with the energy auditing firm SGS. For a few months, Dabkara also worked for a German Government-owned company. In 2008, he started a carbon credit consultancy firm named EnKing International, with a base from his hometown, Indore. For the next seven years, EnKing helped many Indian and overseas companies enrol for carbon credits. That did not bring much revenue except the consultancy fees. Awareness of the carbon credit market was low; carbon credit prices were falling and there were operational issues in the carbon trading mechanism which made it lacklustre for corporations.

By 2013, EnKing could do about 50 GHG (greenhouse gas) projects and after two years, won the first Government tender worth over ₹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", he says. In 2019, the company entered the South East Asian markets and in 2020 alone, traded over 40 million credits and earned over ₹100 crore. In the last two years, EnKing International, rechristened as EKI Energy Services, traded over 100 million carbon credits, says Manish Dabkara.

Why the rally?

There are multiple factors that contributed to the change in the fortunes of EKI Energy. The biggest was Joe Biden taking charge as the U.S. President. On June 1, 2017, then U.S. President Donald Trump withdrew from the 2015 Paris Agreement on climate change mitigation, terming it as detrimental to the U.S. business interests and economy. His successor Joe Biden revoked that decision on January 20 this year, and decided the U.S. will remain committed to the Paris Agreement climate targets. That triggered most corporations across the globe to pledge climate goals, causing carbon credit prices to rise. The voluntary market for carbon credits has become active and attractive as many large corporations in the west—who have committed carbon-neutral goals are investing big in the sector.