Ellenbarrie Industrial Gases Limited (EIGL) is set to launch its initial public offering (IPO) soon, aiming to raise ₹400 crore through a fresh equity issue, alongside an offer for sale (OFS) of 1.44 crore shares. The IPO will follow the bookbuilding process and be listed on BSE and NSE.

While the IPO dates and price bands are yet to be declared, the company has filed its Red Herring Prospectus (RHP) with SEBI. The public issue will help EIGL repay borrowings, expand capacity, and fund general corporate activities.

About the Company

Incorporated in 1973, Ellenbarrie Industrial Gases is an Indian manufacturer and supplier of industrial, medical, and specialty gases. The company deals in a wide range of essential gases such as oxygen, nitrogen, carbon dioxide, acetylene, helium, argon, hydrogen, and nitrous oxide. It also provides dry ice, synthetic air, medical oxygen, and fire-fighting gases, among others.

Key services offered include:

• Engineering and turnkey installation of tonnage air separation units (ASUs)

• Medical gas pipeline installations and maintenance

• Supply of medical equipment including ventilators, anesthesia machines, and sterilizers

Customer Segments

The company serves three core customer types:

• Bulk customers: Supplied with gases through cryogenic tankers

• Package customers: Served via cylinder-based compressed gases

• Onsite customers: Provided with gas generation plants at their premises, with O&M services

EIGL supplied its products to 1,836 customers in FY 2024, including notable names like AIIMS, Dr Reddy's Laboratories, Laurus Labs, Air India Engineering Services, and Rashtriya Ispat Nigam.

Industry Verticals Served

The company has a diverse client base spanning:

• Steel and infrastructure

• Pharmaceuticals and chemicals

• Healthcare institutions

• Aviation, space, and defence

• Railways

• Petrochemicals and energy

Manufacturing and Workforce

EIGL operates eight production facilities located across West Bengal, Andhra Pradesh, Telangana, and Chhattisgarh. As of March 31, 2024, it employed 250 permanent and 67 contractual workers.

IPO Details

• Issue Structure:

  • Fresh issue: ₹400.00 crore

  • Offer for sale: 1,44,27,620 equity shares

• Face value: ₹2 per share

• IPO type: Bookbuilding

• Listing at: NSE and BSE

• Lead Managers:

  • Motilal Oswal Investment Advisors

  • IIFL Capital Services

  • JM Financial

• Registrar: KFin Technologies Limited

Promoter Details

The promoters of the company are Padam Kumar Agarwala and Varun Agarwal. Their pre-issue shareholding stands at 98.96 percent, which will reduce post-issue depending on dilution from OFS and fresh equity issuance.

IPO Reservation Details

• Qualified Institutional Buyers (QIBs): Not more than 50 percent

• Retail Individual Investors (RIIs): Not less than 35 percent

• Non-Institutional Investors (NIIs): Not less than 15 percent

Financial Performance Snapshot

Key Ratios:

• Return on Net Worth (RoNW): 18.10 percent

• Return on Equity (ROE): 11.05 percent

• Return on Capital Employed (ROCE): 12.22 percent

• Debt-to-Equity Ratio: 0.03

• PAT Margin: 15.61 percent

• Pre-IPO EPS: ₹3.46

The company has shown consistent growth in revenue and profit, with a strong bottom line and manageable debt. This performance enhances its investment appeal in the industrial gas sector.

Use of IPO Proceeds

The net proceeds from the fresh issue will be utilised for:

1. Repayment/prepayment of borrowings: ₹176.90 crore

2. Setting up of a 220 TPD air separation unit at Uluberia-II: ₹130.00 crore

3. General corporate purposes

Key Strengths

• Five-decade legacy in the gas manufacturing space

• Diversified industry presence, reducing dependency on any single sector

• Strong brand recognition in eastern and southern India

• Integrated service offerings across industrial and medical gas value chains

• Scalable production capacity with recent investment plans

Risks and Considerations

• Capital-intensive business with high asset maintenance

• Cyclical nature of industrial demand

• Regulatory dependencies in sectors like healthcare and defence

• OFS component may lead to profit booking by existing shareholders

• Raw material and transport costs can impact margins

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  Disclaimer

  This article is for educational and informational purposes only and does not constitute financial advice. Investment decisions should be based on individual risk tolerance and consultation with SEBI-registered advisors. Market conditions are volatile and subject to change. Neither the author nor the platform is responsible for losses arising from use of this information.

  The Upcoming IPOs in this week and coming weeks are Safe Enterprises Retail Fixtures, Globe Civil Projects, Sambhav Steel Tubes, Ellenbarrie Indutrial Gases, Kalpataru, HDB Financials, AJC Jewel, ArisInfra Solutions, Influx Healthtech, Mayasheel Ventures, Eppeltone Engineers.

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  The Current active IPO are Oswal Pumps, Patil Automation, Samay Projects Services, Aten Papers, Monolithisch India.

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