Investing in an Initial Public Offering (IPO) can be a lucrative opportunity, but it’s essential to carefully evaluate the company, its financials, and the market conditions before making a decision. The IRM Energy IPO, scheduled to open for subscription on October 18, 2023, has been generating a lot of buzz among investors. In this article, we will provide you with a comprehensive overview of the IRM Energy IPO, its details, financial performance, and what experts have to say.
Key IPO Details
IRM Energy IPO Date: The IPO will be open for subscription from October 18, 2023, to October 20, 2023.
Price Band: The price band for the IRM Energy IPO is set at ₹480 to ₹505 per share.
Total Issue Size: The company plans to raise ₹545.40 crores through an entirely fresh issue of 1.08 crore shares.
Lot Size: The minimum lot size for an application is 29 shares, requiring a minimum investment of ₹14,645 for retail investors.
Listing Date: The shares of IRM Energy are expected to be listed on BSE and NSE on Tuesday, October 31, 2023.
Reservation and Anchor Investors
The allocation for different investor categories in the IRM Energy IPO is as follows:
- QIB Shares Offered: Not more than 50% of the Net Issue
- Retail Shares Offered: Not less than 35% of the Net Issue
- NII (HNI) Shares Offered: Not less than 15% of the Net Issue
The company successfully raised Rs 160.35 crores from anchor investors on October 17, 2023. The anchor lock-in period for 50% of the shares ends on December 12, 2023, while the remaining shares will have a lock-in period until March 6, 2024.
About IRM Energy Limited
IRM Energy Limited, incorporated in 2015, is a gas distribution company that operates and expands local natural gas distribution networks. They serve various sectors, including industrial, commercial, domestic, and automobile customers.
The company has a notable presence in several regions, including Banaskantha District in Gujarat, Fatehgarh Sahib in Punjab, and Diu & Gir-Somnath in the Union Territory of Daman & Diu and the state of Gujarat.
As of September 2022, the company operates 216 CNG gas stations across its operating areas, serving 48,172 domestic clients, 179 industrial units, and 248 commercial clients.
Financial Performance
Here’s a snapshot of IRM Energy Limited’s financial performance (restated consolidated) between March 31, 2022, and June 30, 2023:
- Revenue: Increased by 90.3%
- Profit After Tax (PAT): Dropped by -50.69%
- Net Worth: Increased to ₹373.33 crores
- Total Borrowings: Stood at ₹321.24 crores
The company’s market capitalization is Rs 2073.51 crores, with a P/E (Price to Earnings) ratio of 24.13.
Expert Opinion
According to experts, IRM Energy is an emerging player in the City Gas Distribution (CGD) segment, with operations in three states. The company has witnessed growth in its top and bottom lines, except for FY23, where it faced margin pressure due to the surge in petroleum and gas prices caused by geopolitical factors.
However, the company’s Q1 performance for FY24 indicates a return to normalcy, and management is confident about sustaining growth. Based on annualized FY24 numbers, the IPO appears to be fully priced, making it a potential long-term investment opportunity.
IPO Objectives
The proceeds from the IPO will be used for:
- Funding capital expenditure requirements for the development of the City Gas Distribution network in the Geographical Areas of Namakkal and Tiruchirappalli (Tamil Nadu) in Fiscal 2024, Fiscal 2025, and Fiscal 2026.
- Prepayment or repayment of outstanding borrowings.
- General corporate purposes.
Conclusion
Investors are advised to review the Red Herring Prospectus (RHP) for detailed information before making their investment decisions. The IRM Energy IPO is poised to be a significant event in the financial market, and it offers a chance for investors to participate in the growth of a company that plays a vital role in the energy sector. It’s crucial to weigh the company’s financials, market conditions, and expert opinions before making your investment call.
For more information, please visit the official IRM Energy Limited website.
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