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IRM Energy IPO: A Closer Look at the IPO by City Gas Distribution Company, Energy IPO

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IRM Energy IPO is scheduled to remain open for subscription until Friday, October 20. The price band for the IPO is set within the range of ₹480 to ₹505 per equity share. This offering consists entirely of a fresh issue, comprising 1.08 crore equity shares with a face value of ₹10 each, and there is no offer for sale (OFS) component. At the upper end of the price band, the company anticipates raising ₹545.40 crore from the public issue.

The prominent promoters behind IRM Energy IPO are Cadila Pharmaceuticals Limited, Dr. Rajiv Indravadan Modi, and IRM Trust.

The IRM Energy IPO lot size is 29 equity shares, with further multiples of 29 equity shares thereafter. Retail investors are required to make a minimum investment of ₹14,645. Notably, the company successfully raised ₹160.35 crore from anchor investors on October 17, a day before the IPO subscription officially opened for bidding.

In terms of financial performance, IRM Energy Ltd. observed a 90.3% surge in revenue and a 50.69% decrease in profit after tax (PAT) between the financial years ending on March 31, 2023, and March 31, 2022.

The primary utilization of the net proceeds from this offering will include prepayment or repayment of certain outstanding borrowings, supporting general corporate purposes, and funding capital expenditure requirements.

The basis of the allotment of shares for the IRM Energy IPO will be finalized on Friday, October 27, with refunds initiated on the same day. Shares will be credited to the demat accounts of allottees on Monday, October 30. The expected listing date for IRM Energy IPO shares on BSE and NSE is Tuesday, October 31, though any potential shift to the T+3 norm could alter these dates. The book-running lead managers for the IRM Energy IPO are HDFC Bank Ltd and Bob Capital Markets Ltd, with Link Intime India Private Ltd serving as the registrar.

IRM Energy IPO GMP today:

The grey market premium (GMP) for IRM Energy Limited IPO today is ₹70 per share. This suggests that IRM Energy shares were trading at a premium of ₹70 in the grey market on Wednesday, as reported by market observers.

Considering the upper end of the IPO price band and the current grey market premium, the estimated listing price for IRM Energy shares stands at ₹575 apiece, marking a 13.86% increase over the IPO price of ₹505.

IRM Energy IPO Review:

IRM’s key growth area is lucrative and relatively underpenetrated, with robust volume growth projected to reach 1.51 mmscmd from the current FY23 volume of 0.54 mmscmd. The government’s emphasis on transitioning to a gas-based economy, the development of the natural gas grid connecting major demand and supply centers in India, and the target of increasing the natural gas share in the energy mix to 15% by FY2030 from 6.3% in FY23 will sustain the structural growth story, as noted by Reliance Securities.

IRM boasts a diverse customer portfolio and an extensive distribution network of CNG and PNG, supported by strong relationships across a varied customer base, including industrial, commercial, and domestic customers. This ensures an efficient and optimal business mix in the future.

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