TruAlt Bioenergy, one of India’s largest biofuels producers, has filed preliminary papers with capital market regulator SEBI to raise funds via initial public offering. The IPO is a combination of fresh issue of shares worth Rs 750 crore, and an offer-for-sale of 36 lakh shares by promoters.
Promoters Dhraksayani Sangamesh Nirani and Sangamesh Rudrappa Nirani will be selling 18 lakh shares each in the offer-for-sale.
Promoters hold 88.20 percent stake in the company and the remaining 11.8 percent are held by public shareholders including Chartered Finance and Leasing, and Vikasa India EIF I Fund.
The Bengaluru-based company may raise Rs 150 crore via private placement, rights issue, preferential offer or any other method, prior to filing of the Red Herring Prospectus with the Registrar of Companies. If the said pre-IPO placement is completed, the amount will be deducted from the fresh issue.
TruAlt will spend Rs 172.68 crore out of the net fresh issue proceeds to set up multi-feed stock operations to pave the way for utilising grains as an additional raw material in ethanol plants at TBL Unit 4 of 300 KLPD capacity, and Rs 425 crore will be spent on working capital requirements. The remaining amount will be used for general corporate purposes.
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The company claims to be India's largest ethanol producer based on installed capacity, with an aggregate production capacity of 1,400 kilo litres per day (KLPD) as of March 2024. Its market share is amongst the largest in terms of ethanol production capacity in fiscal 2024, at 3.7 percent.
The company that competes with Balrampur Chini Mills, Triveni Engineering and Dalmia Bharat intends to expand its ethanol production capabilities by 600 KLPD in three locations, to an aggregate capacity of 2,000 KLPD by October 2024. By March 2026, out of the 2,000 KLPD capacity, they intend to convert 1,000 KLPD to dual-feed, capable of producing ethanol from grain-based feedstocks or grains unfit for human consumption.
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In addition, they target to further expand ethanol production capabilities by setting up two greenfield units with an additional capacity of 700 KLPD comprising of two units of 500 KLPD and 200 KLPD each to an aggregate production capacity of 2,700 KLPD by fiscal 2027.
TruAlt Bioenergy, formerly known as TruAlt Energy, has recorded net profit at Rs 31.8 crore in the fiscal year ended March 2024, down from Rs 35.5 crore in the previous year despite healthy other income, higher revenue and strong operating numbers, impacted by higher finance cost. However, revenue from operations increased sharply to Rs 1,223.4 crore, from Rs 762.4 crore during the same period.
On the operating front, EBITDA (earnings before interest, tax, depreciation and amortisation) in FY24 surged 79 percent to Rs 188 crore with margin expanding by 160 bps to 15.4 percent compared to previous fiscal.
DAM Capital Advisors and SBI Capital Markets are the book running lead managers to the issue.
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