IRM Energy Limited, a city gas distribution (“CGD”) company, engaged in the business of laying, building, operating and expanding the city or local natural gas distribution network, has fixed the price band at ₹480 to ₹505 per Equity Share for its maiden initial public offer. The Initial Public Offering (“IPO” or “Offer”) of the Company will open on Wednesday, October 18, 2023, for subscription and close on Friday, October 20, 2023. Investors can bid for a minimum of 29 Equity Shares and in multiples of 29 Equity Shares thereafter.
The Public Issue of face value of ₹10 per Equity Share is entirely a fresh issue of equity shares up to 1,08,00,000 with no offer for sale component. The offer also includes a reservation for a subscription by eligible employees and a discount of Rs 48 per equity share is being offered to eligible employees bidding in the employee reservation portion.
The company intends to utilise about ₹307.26 crore for funding capital expenditure requirements for development of the City Gas Distribution network in the Geographical Areas of Namakkal and Tiruchirappalli (Tamil Nadu) in coming years, while ₹135 crore will be used for prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company, and general corporate purpose.
The company has operations at Banaskantha (Gujarat), Fatehgarh Sahib (Punjab), Diu & Gir Somnath (Union Territory of Daman and Diu/Gujarat), and Namakkal & Tiruchirappalli (Tamil Nadu), serving 184 industrial customers, 269 commercial customers, 52,454 domestic customers, as at June 30, 2023.
As of October 9, 2023, IRMEL had an established a network of 69 CNG filling stations, comprising 2 CNG stations owned and operated by the company (the "COCO Stations"), 36 CNG stations owned and operated by dealers (the "DODO Stations"), and 31 CNG stations owned and operated by oil marketing companies (the "OMC Stations").
IRM Energy Limited (IRMEL) in order to capitalize on synergetic its business opportunities, has entered into a strategic and technical partnership with Shizuoka Gas Co. Ltd, Japan (“ShizGas”) fourth largest gas company in Japan by natural gas sales volume, by infusing capital through a private placement in IRMEL. On the other hand, in order to achieve business integration, it invested in Farm Gas Private Limited, Venuka Polymers Private Limited Ni Hon Cylinders Private Limited. Additionally, it has signed a memorandum of understanding (“MoU”) with Mindra EV Private Limited for setting up an electric vehicle (“EV”) charging infrastructure at DODO Stations and COCO Stations for a period of five years, with a vision of transitioning of becoming an energy-oriented company.
The company’s revenue from operations increased by 6.51% from Rs 230.27 crore for the three months ended June 30, 2022 to Rs 245.25 crore for the three months ended June 30, 2023, primarily due to an increase in the sale of compressed natural gas, piped natural gas and increase in connection income and other operating revenue. Whereas, profit after tax increased by 31.01% from Rs 20.54 crore in the three months ended June 30, 2022 to Rs 26.91 crore in the three months ended June 30, 2023 due to increase in total revenue.
Revenue for fiscal 2023 grew 90.27% to Rs 1039.13 crore from Rs 546.14 crore for the Financial Year 2022 and profit after tax fell 50.68% to Rs 63.15 crore for the FY 2023 against Rs 128.03 crore in FY22, due to significant increase in input gas cost as well as due to lower profits earned by joint control entities.
HDFC Bank Limited and BOB Capital Markets Limited are the book running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.
Notes for Reference:
Issue Size of the IPO based on the upper and lower end of the price band
Fresh (1,08,00,000 equity shares)
Lower Band (@480)
Rs 518.40 crore
Upper Band (@505)
Rs 545.40 crore