The IRM Energy IPO, amounting to Rs 545.40 crores, is a book-built issue comprising entirely of fresh shares totaling 1.08 crore. Bidding for the IPO commenced on October 18, 2023, and concluded on October 20, 2023. Allotment was finalized on Friday, October 27, 2023, and the shares were listed on both BSE and NSE on October 26, 2023.
The price band for the IRM Energy IPO was set at ₹480 to ₹505 per share. The minimum lot size for application was 29 shares, requiring a minimum investment of ₹14,645 for retail investors. Subscribers under the sNII category were required to apply for a minimum of 14 lots (406 shares), totaling ₹205,030, while those under the bNII category had to apply for at least 69 lots (2,001 shares), amounting to ₹1,010,505.
Additionally, the IPO included a reservation of up to 216,000 shares for employees, offered at a discount of Rs 48 to the issue price. HDFC Bank Limited and BOB Capital Markets Limited served as the book running lead managers for the IRM Energy IPO, with Link Intime India Private Ltd acting as the registrar for the issue.
Objective of IPO.
IRM ENERGY IPO Details |
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IPO Date | October 18, 2023 to October 20, 2023 | ||||||||||
Listing Date | October 26, 2023 | ||||||||||
Face Value | 10 | ||||||||||
Price | 480-505 | ||||||||||
Lot Size | 29 shares | ||||||||||
Total Issue Size | 545 | ||||||||||
Fresh Issue | 10,800,000 shares (aggregating up to ₹545.40 Cr) | ||||||||||
Offer for Sale | |||||||||||
Issue Type | Book Built Issue IPO | ||||||||||
Listing At | NSE, BSE | ||||||||||
Share holding pre issue | 30,259,677 | ||||||||||
Share holding post issue | 41,059,677 |
IRM ENERGY IPO Lot Size |
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Application | Lots | Shares | Amount | ||||||||
Retail (Min) | 1 | 29 | ₹14,645 | ||||||||
Retail (Max) | 13 | 377 | ₹190,385 | ||||||||
S-HNI (Min) | 14 | 406 | ₹205,030 | ||||||||
S-HNI (Max) | 68 | 1,972 | ₹995,860 | ||||||||
B-HNI (Min) | 69 | 2,001 | ₹1,010,505 |
IRM ENERGY IPO Timeline (Tentative Schedule) |
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IPO Open Date | Wednesday, October 18, 2023 | ||||||||||
IPO Close Date | Friday, October 20, 2023 | ||||||||||
Basis of Allotment | Friday, October 27, 2023 | ||||||||||
Initiation of Refunds | Friday, October 27, 2023 | ||||||||||
Credit of Shares to Demat | Monday, October 30, 2023 | ||||||||||
Listing Date | Thursday, October 26, 2023 | ||||||||||
Cut-off time for UPI mandate confirmation | 5 PM on October 20, 2023 |
IRM ENERGY IPO Reservation |
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Investor Category | Shares Offered | Reservation % | |||||||||
Anchor Investor Shares Offered | 3,175,200 (29.40%) | N/A | |||||||||
QIB Shares Offered | 2,116,800 (19.60%) | N/A | |||||||||
NII (HNI) Shares Offered | 1,587,600 (14.70%) | ||||||||||
bNII > ₹10L | 1,058,400 (9.80%) | 2,606 | |||||||||
sNII < ₹10L | 529,200 (4.90%) | 1,303 | |||||||||
Retail Shares Offered | 3,704,400 (34.30%) | 127,737 | |||||||||
Employee Shares Offered | 216,000 (2.00%) | NA | |||||||||
Total Shares Offered | 10,800,000 (100%) |
IRM ENERGY IPO Promoter Holding |
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Share Holding Pre Issue | 67.94% | ||||||||||
Share Holding Post Issue |
IRM ENERGY IPO Subscription Status |
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Investor Category | Shares Offered | Shares Bid For | No oF Times Subscribed |
The company is engaged in the business of laying, building, operating, and expanding the city or local natural gas distribution network. It is a city gas distribution (“CGD”) company in India, with operations at Banaskantha (Gujarat), Fatehgarh Sahib (Punjab), Diu & Gir Somnath (Union Territory of Daman and Diu/Gujarat), and Namakkal & Tiruchirappalli (Tamil Nadu).
The company supplies PNG & CNG to its custmers.
Compressed Natural Gas: Customers include operators of public transport vehicles such as taxis, auto-rickshaws, and private vehicles such as cars, buses, light goods vehicles, and heavy goods vehicles.
Piped Natural Gas: Customers are broadly classified into three segments, which are, industrial PNG (small, medium and large-sized enterprises), commercial PNG (such as hotels, restaurants, bakeries, hostels and community halls) and domestic PNG (predominantly using PNG as cooking gas).
Natural gas consumption in India clocked a compound annual growth rate (CAGR) of 3.8% between fiscals 2016 and 2020, rising to ~176 mmscmd in fiscal 2020. However, it dipped 5% in fiscal 2021 due to Covid-19 related challenges such as constrained transportation and industrial activities. Demand rose again ~4.8% in fiscal 2022.
Total household PNG connections are expected to surge from ~78.2 lakh as of fiscal 2021 to 190-200 lakh by fiscal 2026 due to increasing CGD penetration in newer areas and the government’s push to increase gas consumption. This number will further multiply with the CGD network covering Andhra Pradesh, Tamil Nadu, Telangana, West Bengal, etc, between fiscals 2025 and 2030. Moreover, consumption per connection should increase due to rising disposable income and economic growth. Consequently, demand from the domestic segment is projected to log a 38-39% CAGR between fiscals 2023 and 2030.
Industrial PNG demand to clock an 7-8% CAGR between fiscals 2023 and 2027, with demand stabilising at a 6-7% CAGR between fiscals 2027 and 2030. Newer geographical areas (GAs) will have a lower share in industrial demand over the long term, as the major industrial regions, such as Gujarat, Maharashtra, and Delhi, have already shifted to PNG. However, long-term demand growth from the commercial segment could remain healthy.
Risk Analysis.
Period Ended | 30 Jun 2023 | 31 Mar 2023 | 31 Mar 2022 | 31 Mar 2021 |
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Reserve of Surplus | 343 | 316.1 | 193.30 | 67.57 |
Total Assets | 838.21 | 792.90 | 554.80 | 338.11 |
Total Borrowings | 321.24 | 303.83 | 202.59 | 163.35 |
Fixed Assets | 387.6 | 361 | 284 | 230 |
Cash | 103.6 | 98.4 | 99.6 | 41.3 |
Net Borrowing | 217.5 | 205.3 | 102.9 | 121.8 |
Revenue | 248.63 | 1,045.10 | 549.19 | 212.54 |
EBITDA | - | - | - | - |
PAT | 26.91 | 63.14 | 128.0 | 34.89 |
EPS | 8.89 | 20.93 | 43.88 | 12.39 |
Key Performance Indicator |
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KPI | Values | ||||||||||
EPS Pre IPO (Rs.) | 20.93 | ||||||||||
EPS Post IPO (Rs.) | - | ||||||||||
P/E Pre IPO | 24.13 | ||||||||||
P/E Post IPO | 32.8 | ||||||||||
ROE | 18.23% | ||||||||||
ROCE | 14.19% | ||||||||||
P/BV | 2.33 | ||||||||||
Debt/Equity | 0.93 | ||||||||||
RoNW | 18.23% |
IRM ENERGY Limited IPO Peer Comparison |
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Company Name | EPS | ROCE | ROE | P/E (x) | P/Bv | Debt/Equity | RoNW (%) | ||||
Gujarat Gas Ltd | 16 | 31.2% | 24.2% | 33.8 | 5.26 | 0.02 | 31.2% | ||||
Indraprastha Gas Ltd | 24.2 | 26.7% | 20% | 17.6 | 3.69 | 0.01 | 26.7% | ||||
Mahanagar Gas Ltd | 131 | 26.8% | 20.4% | 10.5 | 2.89 | 0.02 | 26.8% | ||||
Adani Total Gas Ltd | 5.43 | 20.7% | 20.4% | 169 | 31.3 | 0.42 | 20.7% | ||||
IRM ENERGY Limited | 20.93 | 14.19% | 18.23% | 24.13 | 2.33 | 0.93 | 18.23% |
IRM Energy Limited
4th Floor, Block 8, Magnet
Corporate Park, Near Sola Bridge
S.G. Highway, Ahmedabad 380054
Phone: +917949031500
Email: investor.relations@irmenergy.com
Website: https://www.irmenergy.com/
Link Intime India Pvt. Ltd.
Address: C - 101, 1st Floor, 247 Park L.B.S. Marg, Vikhroli West,
Mumbai 400 083, Maharashtra, India
Phone: +91-22-4918 6270
Email: irmenergy.ipo@linkintime.co.in
Website: https://linkintime.co.in/initial_offer/public-issues.html
IRM Energy Ltd. (IEL) operates in the city gas distribution sector across various regions in India. Over the past three fiscal years, its consolidated financials have shown steady growth in total income and net profit. However, FY23 saw margin pressure due to rising gas and petroleum prices amid global unrest caused by the Ukraine-Russia conflict. With market stability returning, the company anticipates improved performance in the future. Priced at a P/BV of 4.09 based on its NAV of Rs. 123.38 and 2.33 based on its NAV of Rs. 216.95 per share as of June 30, 2023, the IPO is considered fully priced but holds promising prospects for medium to long-term investors, given IEL's leading position in its segment and signs of normalcy in its Q1-FY24 performance.
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