IRM Energy IPO to Open on October 18; Sets Price Band at Re 480-505/ Share

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The IPO is a fresh issue of up to 1.08 crore equity shares by existing shareholders, and includes reservation for subscription by eligible employees, and a discount of Rs 48 per equity share is being offered to such employees

City gas distribution company IRM Energy Ltd on Wednesday fixed a price band of Rs 480-505 per share for its Rs 545-crore initial public offering (IPO). The initial share-sale will open for public subscription on October 18 and conclude on October 20, according to the company.

The IPO is a fresh issue of up to 1.08 crore equity shares by existing shareholders. The offer also includes reservation for subscription by eligible employees, and a discount of Rs 48 per equity share is being offered to such employees.

At present, the promoters own 67.94 per cent stake in the company, with the majority being held by Cadila Pharmaceuticals (49.50 per cent), and the remaining shares being held by IRM Trust through its managing trustee Rajiv Indravadan Modi. The company will mobilise Rs 518.4 crore and Rs 545.4 crore at the lower and upper end of the price band, respectively.

Proceeds from the issue to the tune of Rs 307.26 crore will be used to fund capital expenditure requirements for development of the city gas distribution network at Namakkal and Tiruchirappalli in Tamil Nadu, Rs 135 crore for payment of debt. Besides, a portion will be used for general corporate purposes. Investors can bid for a minimum of 29 equity shares and in multiples of 29 shares thereafter.

IRM Energy provides piped natural gas (PNG) and compressed natural gas (CNG). It has operations in states including Gujarat, Punjab and Tamil Nadu and serves 184 industrial customers, 269 commercial customers, 52,454 domestic customers, as of June 2023. It has an established network of 69 CNG filling stations, comprising 2 owned and operated by the company, 36 owned and operated by dealers and 31 owned and operated by oil marketing companies.

The company’s revenue from operations rose 6.51 per cent to Rs 245.25 crore in April-June 2023 from Rs 230.27 crore in the year-ago period. Besides, profit after tax jumped 31 per cent to Rs 26.91 crore in the quarter from Rs 20.54 crore in the three months ended June 30, 2022.

HDFC Bank and BOB Capital Markets are the book-running lead managers to the issue. Equity shares of the company are proposed to be listed on BSE and NSE.