Gujarat-based city gas distribution company IRM Energy has fixed the price band at Rs 480-505 per share for its maiden public issue which will open on October 18.
The Cadila Pharmaceuticals-backed company plans to raise Rs 545.40 crore from the public offer of 1.08 crore equity shares at the upper price band.
The IPO comprises only a fresh issue component and there is no offer-for-sale portion, hence the utilisation of entire issue proceeds will take place for the company. The offer will be open for anchor investors for a day on October 17, while the issue closing date has been fixed as October 20.
The total market capitalisation of the company at the upper price band comes to Rs 2,073.5 crore.
Lot Size
Investors can bid for a minimum of 29 equity shares and in multiples of 29 shares thereafter. The minimum application size for retail investors would be Rs 14,645 for 29 shares and their maximum investment would be Rs 1,90,385 for 377 shares as they can't exceed investment beyond Rs 2 lakh in the IPO.
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The company has reserved 2.16 lakh shares worth Rs 10.91 crore for its employees who will get those shares at a discount of Rs 48 per share to the final issue price.
It has also allotted half of the quota of net issue (excluding employees shares) for qualified institutional buyers, 15 percent for the high net-worth individuals and, the remaining 35 percent for retail investors.
Objects of Issue
Of the net fresh issue proceeds, IRM Energy will spend Rs 307.26 crore funds for development of the city gas distribution network in the geographical areas of Namakkal and Tiruchirappalli (Tamil Nadu) in FY24 (last four months), FY25, FY26 and FY27 (first half). The debt repayment amounting to Rs 135 crore will also be done through the IPO funds, and the remaining fresh issue money will be utilised for general corporate purposes.
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The city gas distribution company with operations in Banaskantha (Gujarat), Fatehgarh Sahib (Punjab), Diu & Gir Somnath (Union Territory of Daman and Diu/Gujarat), and Namakkal & Tiruchirappalli (Tamil Nadu), is engaged in the business of laying, building, operating, and expanding the city or local natural gas distribution network.
Financials
Weak operating performance hit the earnings performance for the year ended March FY23, with cost of purchases of stock-in-trade of natural gas rising significantly from Rs 249.2 crore in FY22 to Rs 779.5 crore in FY23. Net profit for FY23 at Rs 63.15 crore halved from Rs 128 crore in the previous year.
Revenue from operations increased considerably to Rs 1,039 crore in the year FY23, up from Rs 546.1 crore in the previous year.
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In the quarter ended June FY24, the net profit of the company rose to Rs 26.9 crore from Rs 20.5 crore in the corresponding period last fiscal. Revenue from operations during the same period increased to Rs 245.2 crore, from Rs 230.2 crore.
Promoters
Dr Rajiv Indravadan Modi, Cadila Pharmaceuticals, and IRM Trust are the promoters of the company, holding 67.94 percent shares. And 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.
The company competes with Gujarat Gas, Indraprastha Gas, Mahanagar Gas, and Adani Total Gas.
Listing Date
IRM Energy in consultation with the NSE will finalise the basis of allotment of IPO shares by end of October 26 and will transfer equity shares to the demat accounts of eligible investors by October 30.
The listing of its equity shares will take place in the T+6 timeline on the exchanges on October 31.
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The merchant bankers to the offer are HDFC Bank, and BOB Capital Markets, while Link Intime India is the registrar to the issue.
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