PUNE: Numerous companies that recycle electronic waste are seeing a spurt in growth and drawing investor interest after new rules placing the onus on producers and bulk consumers for the safe disposal of used gadgets came into effect last year.
The e-waste startups, which collect, segregate and recycle electronic components, have seen even more than five-fold rise in revenues in some cases since the introduction of the regulations. “Four years ago, the organised sector handled less than 3% of the e-waste generated in India, but today the figure has moved up to 7.5%,” said Shankar Sharma, a director at Gurgaon-based ewaste company Green Vortex. The venture, set up with Sharma’s personal savings of Rs 30 lakh in 2009, has seen revenue grow from Rs 15 lakh in fiscal 2011 to Rs 1 crore this year. Sharma is now targeting revenue of Rs 8 crore by fiscal 2014.
The new opportunities have boosted investor sentiment across the sector. Noida-based Attero Recycling is poised to raise nearly Rs 200 crore of fresh capital from a group of investors, including Texas-based Waste Management Inc. Green Vortex expects to raise fresh funding of Rs 15 crore.
“We are seeing startups becoming more active after the regulations came into force,” said Subrata Barman, a senior operations officer at IFC, the investment arm of the World Bank and an early investor in Attero. “The law has made producers as well as bulk consumers to look for recyclers who are licenced and are known for green recycling.”
It is this shift towards organised recycling by users who earlier relied on the neighbourhood “kabbadiwalla” that is creating a wave of opportunity. Experts estimate that India generates close to a million tonnes of ewaste a year, of which over 93% is recycled by unorganised dealers in a hazardous manner.
“Consumers still go to the informal sector as there is cash to be made from e-waste,” said Anwar Shirpurwala, executive director of the Manufacturers Association of Information Technology, who expects the new regulations to help create the transition to organised recycling in the next few years.
Mumbai-based Ecocentric, founded by Karan Thakkar, has set up a 1,200-metric tonne plant funded from his own resources and bank loans to recycle e-waste.
These start-ups are also finding new business from users who are concerned about the safety of data when used gadgets are being disposed.
“There is always fear of sensitive data getting used for wrong purposes. We give companies the guarantee that data will be completely destroyed before the e-waste is reused or recycled,” said Nitin Gupta, CEO of Attero Recycling, which earned monthly revenues of around Rs 18 crore in the last fiscal.
Jeevesh Kumar, who set up Greenscape Eco Management in Delhi after a stint at IBM, believes start-ups have an uphill task, with many users preferring to give the e-waste to the cheapest recycler rather a responsible one. Currently, Greenscape earns revenue of about Rs 60 crore.
But as the opportunity grows, so will competition. “Five years ago, when Attero came up we were seeing a market ahead of time. Startups wanting to enter today will have to offer the same business with a different twist,” said Kumar Shiralagi, managing director of Kalaari Capital, which has invested in Attero.