IRM Energy Limited’s IPO is live. Should you Invest?
In this article
📃About IRM Energy Limited
Incorporated in 2015, IRM Energy Limited is a gas distribution company. The company is developing, operating, and expanding the local natural gas distribution network. IRM Energy is a value-driven energy enterprise serving industrial, commercial, domestic, and automobile customers.
The company has marked its presence in Banaskantha District in the state of Gujarat, Fatehgarh Sahib in the state of Punjab, and Diu &Gir-Somnath in the Union Territory of Daman & Diu and the state of Gujarat.
The company fulfils the natural gas requirements of 48172 domestic clients, 179 industrial units, and 248 commercial clients.
The company has received an award of City Gas Distribution- Growing Company of the Year 2020 from the Federation of Indian Petroleum Industries.
As of September 2022, the company has 216 CNG gas stations across its operating geographical areas.
💰Issue Details of IRM Energy Limited
- IPO open from 18th Oct 2023 – 20th Oct 2023
- Face value: ₹10 per equity share
- Price band: ₹480 to ₹505 per share
- Market lot: 29 shares
- Minimum Investment: ₹14,645
- Listing on: BSE and NSE
- Offer for sale: Approx ₹545.40 Cr (Fresh Issue: ₹545.40 Cr)
- Registrar: Link Intime India Private Ltd
🪙Total Issue Price
🪚Offer Breakup
🔭IPO Object
The company intends to utilise the net proceeds from the issue towards the funding of the following objects:
- 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 all or a portion of certain outstanding borrowings availed by the Company; and
- General corporate purposes.
⛓️IPO Strength
Some of the qualitative factors and strengths that form the basis for computing the Offer Price are:
- Exclusivity in CNG and PNG supply in the awarded Gas
- Successful development and operation of CGD business
- Diverse customer portfolio and distribution network of CNG and PNG
- Strong financial performance with consistent growth and profitability supported by healthy operating efficiency and favourable regulations
- Strong parentage, experienced board and management team and strong execution team
🧨IPO Risk
- They depend on Government policies to allocate natural gas and the cost of gas supplied for their CNG and domestic PNG customers. Any reduction in the allocation of natural gas or any increase in the cost of gas could adversely affect their business.
- Their operations are restricted to defined geographical boundaries, and the natural gas requirements in these regions may be affected by various factors outside their control, which may adversely affect their business operations, profitability and cash flows.
- They are dependent on third parties for sourcing and transportation of natural gas. Any disruption in the receipt of such natural gas from these third parties or delay or default in timely transportation of the natural gas could lead to a disruption or failure in the supply of natural gas by them, which could adversely affect their business, results of operations and cash flows.
- Transporting natural gas is hazardous and could result in accidents, fires and explosions, adversely affecting their business, financial condition, results of operations and cash flows.
💸Financial Data
| Period Ended | Total Assets | Total Revenue | Profit After Tax |
| 31-Mar-21 | ₹338.11 | ₹212.54 | ₹34.89 |
| 31-Mar-22 | ₹554.80 | ₹549.19 | ₹128.03 |
| 31-Mar-23 | ₹792.90 | ₹1045.10 | ₹63.14 |
PEER COMPANIES
- Gujarat Gas Limited
- Indraprastha Gas Limited
- Mahanagar Gas Limited
- Adani Total Gas Limited
📬Also Read: A Simple Guide: Opening a Demat Account for Minors in Bharat
