Ellenbarrie Industrial Gases plans to raise funds via IPO, files draft papers with SEBI

Ellenbarrie Industrial Gases IPO

Ellenbarrie Industrial Gases, one of the oldest operating industrial gases companies in India, has filed preliminary papers with the capital markets regulator SEBI to raise funds via a public issue.

The company was listed on Calcutta Stock Exchange and was subsequently delisted effective July 2, 2018. Further, it was using the trading platform of BSE under permitted to trade category since July 3, 2008 but the same was suspended effective March 8, 2017.

The IPO is a combination of fresh issuance of equity shares worth Rs 400 crore, and an offer-for-sale of 1.44 crore equity shares by promoters.

Promoters Padam Kumar Agarwala, and Varun Agarwal will be offloading 72.13 lakh equity shares via offer-for-sale.

The Kolkata-based liquid oxygen manufacturer may also consider raising of funds up to Rs 80 crore in a pre-IPO placement before the filing of the red herring prospectus (RHP) with the Registrar of Companies (ROC). If the pre-IPO placement is completed, the said amount will be reduced from the fresh issue.

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Ellenbarrie is the largest 100 percent Indian-owned industrial gases company in terms of installed manufacturing capacity as of fiscal 2024. It is one of the largest manufacturers of industrial gases in East and South India.

It has a diversified customer base, and sold products to 1,836 customers in FY24, including Jairaj Ispat, Rashtriya Ispat Nigam, Dr Reddy's Laboratories, Laurus Labs, All India Institute of Medical Sciences, West Bengal Medical Services Corporation, GMM Pfaudler, Air India Engineering Services, Jupiter Wagons, Hindustan Shipyard, and oil marketing public sector undertakings.

The company intends to utilise Rs 177 crore out of the net fresh issue proceeds for repaying debt, Rs 130 crore for setting up of air separation unit at Uluberia-II plant with a capacity of 220 TPD; and the remaining funds for general corporate purposes. Post issue, it is likely to turn debt-free.

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The financial performance showed some inconsistency with profit rising 61 percent on-year to Rs 45.3 crore in the year ended March 2024, but in FY23, declined 58 percent to Rs 28.1 crore compared to FY22. Revenue in the fiscal 2024 increased by 31.4 percent to Rs 269.5 crore YoY but in FY23, fell 16.1 percent to Rs 205.1 crore compared to FY22.

Motilal Oswal Investment Advisors, IIFL Securities, and JM Financial are acting as the book running lead managers to the issue.