IRM Energy Sets Price Band For Rs. 545 Cr IPO: Details Inside

IRM Energy Limited, a city gas distribution firm that develops and maintains the local or city natural gas distribution network, has set the price band for its initial public offer (IPO) of Rs 545 Cr at Rs 480 to Rs 505 per equity share.

The company's Initial Public Offering (IPO) will begin accepting subscriptions on Wednesday, October 18, 2023, and end on Friday, October 20, 2023. IRM Energy IPO has set aside a maximum of 50% of the net issue for qualified institutional buyers (QIB), a minimum of 15% for non-institutional investors (NII), and a minimum of 35% for retail investors.

The initial public offering of equity shares with a face value of Rs. 10 each consists only of fresh issuance of equity shares up to a total of 1,080,000, with no offer for sale (OFS) included. A discount of Rs 48 per equity share is being provided to eligible employees who bid in the employee reservation section of the offer, which also includes a reservation for a subscription by eligible employees. Investors may place a minimum bid of 29 equity shares and any subsequent bids in multiples of 29 equity shares.

The company plans to use about Rs 307.26 crore to fund the capital expenses needed to develop the City Gas Distribution network in the Tamil Nadu geographic areas of Namakkal and Tiruchirappalli, while Rs 135 crore will be used for prepayment or repayment of all or a portion of certain outstanding borrowings.

From Rs 230.27 crore for the quarter ended June 30, 2022 to Rs 245.25 crore for the quarter ended June 30, 2023, the company's revenue from operations jumped by 6.51%. This spike was primarily the result of an increase in the sale of compressed natural gas and piped natural gas, as well as an increase in connection income and other operating revenue. However, due to a rise in total revenue, profit after tax grew by 31.01%, from Rs 20.54 crore in Q1FY23 to Rs 26.91 crore in Q1FY24.

In light of a significant increase in input gas expenses as well as lower profits made by joint control entities, revenue for the fiscal year 2023 bumped 90.27% in FY23 to Rs 1039.13 crore from Rs 546.14 crore for the financial year 2022, while profit after tax dropped 50.68% to Rs 63.15 crore from Rs 128.03 crore in FY22.

The book-running lead managers for the offer are HDFC Bank Limited and BOB Capital Markets Limited, while Link Intime India Private Limited is the registrar.

The shares of IRM Energy are proposed to be listed on Tuesday, October 31, 2023 on BSE, NSE platform.
As of October 12th, 2023, 11:30 AM, the latest GMP for the IRM Energy IPO was Rs 90. The expected listing price for the IRM Energy IPO, considering an upper price band of Rs 505, is Rs 595 (cap price plus the current GMP). In light of the latest GMP, grey market observers estimate that IRM Energy will list at a premium of 17.82% over the issue price.