Cadila Pharmaceuticals-backed IRM Energy concluded its initial public offering (IPO) on Friday, raising Rs 545.4 crore ($72.6 million). The IPO was subscribed 27.05 times, with non-institutional investors subscribing 48.34 times, qualified institutional buyers 44.73 times, and retail investors 9.29 times.
The company raised Rs 160.35 crore from anchor investors including Quant Mutual Fund, SBI General Insurance, HDFC Life, DSP MF, ITI MF, BOI MF, Nippon AIF, and PNB Metlife (NYSE:MET) by allotting 31.75 lakh shares at Rs 505 each.
The price band for the IPO was set at Rs 480-505 per share. The majority stake of 67.94 percent is held by promoters Rajiv Indravadan Modi, Cadila Pharmaceuticals and IRM Trust, while the rest is held by Enertech Distribution Management and Shizuoka Gas Company.
Despite a fall in profit margin from 20.8 percent in FY22 to 5.4 percent in FY23, and EBITDA margin from 31 percent to 10 percent due to low allocation of Administered Price Mechanism gas and high non-APM gas prices, the company's Q1FY24 consolidated revenue rose to Rs 245.2 crore with an EBITDA margin of 17.2 percent and PAT margin of 11 percent.
IRM Energy operates in city gas distribution, selling compressed and piped natural gas within geographical areas including Diu and Gir, Somnath in Gujarat; Namakkal and Tiruchirappalli districts in Tamil Nadu; Banaskantha in Gujarat and Fatehgarh Sahib in Punjab.
The proceeds from the IPO will be used for expanding the city gas distribution network in Namakkal and Tiruchirappalli, Tamil Nadu, repaying a Rs 135 crore debt, and for general corporate purposes. The company has seen a volume growth of 30.04 percent and despite the EV market risk, it shows potential for positive growth with its strong parentage of Cadila Pharmaceuticals Ltd.
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