IRM Energy IPO opens on Oct 18: 10 things to know before you buy into Rs 545.4-cr issue

IRM Energy IPO will open for subscription on October 18, 2023, and close on October 20, 2023

The public issue of IRM Energy, the first mainboard IPO of the week, opens for subscription on October 18. The company is looking to raise Rs 545.4 crore through the offer. The offer will open for anchor investors on October 17. HDFC Bank and BoB Capital Markets are the book-running managers for the issue and the registrar is Link Intime.

Here are 10 key things to know before you subscribe to the offer:

1) Dates

The offer will open for subscription on October 18 and close on October 20, 2023.

2) Price Band

The Gujarat-based city gas distribution company has fixed the price band at Rs 480-505 per share.

3) Offer Details

IRM Energy plans to raise Rs 545.4 crore through the IPO, which is a pure fresh issue of 1.08 crore shares and there is no offer-for-sale component.

4) Objectives 

IRM Energy plans to spend Rs 307.26 crore for the development of the city gas distribution network in Namakkal and Tiruchirappalli in Tamil Nadu. The company will also use the proceeds to pay debt amounting to Rs 135 crore and the remaining funds will be utilised for general corporate purposes.

Read: IRM Energy sets IPO price band at Rs 480-505, hopes to raise Rs 545 crore

5) Lot size

Investors can bid for a minimum of 29 equity shares and in multiples of 29 thereafter. Hence, the minimum investment by retail investors will be Rs 13,920. At the upper end, the bidding amount will increase to Rs 14,645.

6) Company Profile

IRM Energy operates in Banaskantha (Gujarat), Fatehgarh Sahib (Punjab), Diu & Gir Somnath (Union Territory of Daman and Diu/Gujarat), and Namakkal and  Tiruchirappalli in Tamil Nadu. The company distributes CNG for use in motor vehicles and PNG for use by domestic households as well as for commercial and industrial units.

7) Financials

The city gas distribution company’s net profit slumped over 50 percent to Rs 63.15 crore in FY23 against Rs 128 crore in FY22, owing to a weak operating performance. The cost of purchase of stock-in-trade of natural gas, rose significantly from Rs 249.2 crore in the year ended March 2022 to Rs 779.5 crore in FY23. Revenue from operations jumped 90 percent to Rs 1,039 crore from Rs 546.1 crore in the same period.

8) Competitors

IRM Energy’s main competitors are Gujarat Gas, Indraprastha Gas, Mahanagar Gas and Adani Total Gas.

9) Promoters

Rajiv Indravadan Modi, Cadila Pharmaceuticals and IRM Trust are the promoters of the company. They together hold 67.94 percent shares, the draft red herring prospetcus said. The remaining stake is held by public shareholders including Enertech Distribution Management with 28.65 percent shares and Shizuoka Gas Company with 2.94 percent shares.

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10) Listing Date

IRM Energy will finalise the basis of the allotment of IPO shares by the end of October 27 and transfer equity shares to the demat accounts of eligible investors by October 30. The stock will likely list on October 31 in accordance with the T+6 timeline.