IRM Energy IPO: Company Raises Over Rs 160 Crore From Anchor Investors

New Delhi: City gas distribution company IRM Energy Ltd on Tuesday said it has raised over Rs 160 crore from anchor investors ahead of its initial share sale that opens for subscription on Wednesday.

Allotment of Equity Shares

The company has decided to allot 31.75 lakh equity shares to 12 funds at Rs 505 apiece, which is also the upper end of the price band, aggregating the transaction size to Rs 160.35 crore, according to a circular uploaded on the BSE website.

Anchor Investors

Foreign investors and domestic institutions -- Quant Mutual Fund, SBI General Insurance Company HDFC Life Insurance Company, DSP MF, ITI MF, BOI MF, Nippon AIF, and PNB Metlife -- were the anchor investors.

IPO Details

The IPO is a fresh issue of up to 1.08 crore equity shares. 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 issue, with a price band of Rs 480-505 per share will open for public subscription on October 18 and conclude on October 20. The company will mobilise Rs 518.4 crore and Rs 545.4 crore at the lower and upper end of the price band, respectively.

Use of Proceeds

Proceeds from the issue to the tune of Rs 307.26 crore will be used to fund capital expenditure requirements for the 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.

Company Profile

IRM Energy provides piped natural gas and compressed natural gas CNG. It has operations in states, including Gujarat, Punjab, and Tamil Nadu and serves 184 industrial customers, 269 commercial customers, and 52,454 domestic customers as of June 2023.

It has an established network of 69 CNG filling stations, comprising two 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 percent to Rs 26.91 crore in the quarter from Rs 20.54 crore in the three months ended June 30, 2022.

Book-Running Lead Managers

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 the BSE and the NSE.