Mumbai: IRM Energy Limited a city gas distribution (CGD) company engaged in laying, building, operating and expanding a city or local natural gas distribution network — has come out with its maiden Initial Public Offering (IPO) with price band of Rs 480 to Rs 505 per Equity Share.
The IPO will open for public issue of 1,08,00,000 equity shares – totaling Rs 541 crores on October 18, 2023 and close on October 20, 2023 with no ‘Offer for Sale’ component. The equity shares are proposed to be listed on BSE and NSE.
Noting that Rs 541 crores is expected to be raised through this IPO, Harshal Anjaria, CFO, IRMEL, said the company’s focus is mainly on CNG and Rs 42 crores contribution came from its Japanese partner “whose technology partnership is valuable.”
The company intends to utilize about Rs 307.26 crore for funding capital expenditure requirements for development of the City Gas Distribution network in the geographical areas of Namakkal & Tiruchirappalli (Tamil Nadu) in coming years, while Rs 135 crore will be used for prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company, and for general corporate purpose.
The company has operations at Banaskantha (Gujarat), Fatehgarh Sahib (Punjab), Diu and Gir Somnath, and Namakkal & Tiruchirappalli – serving 184 industrial customers, 269 commercial customers, 52,454 domestic customers as at June 30, 2023.
Banaskantha GA: is highlighting: CNG demand from floating vehicles, western dedicated freight corridor and an upcoming Indian Air Force base in Deesa.
Fatehgarh Sahib GA: is witnessing over 90% demand and opportunities with industries (as per NGT order) switching to PNG. Mandi Gobindgarh has over 400 industries (of which the company is catering to 180 of them), besides the upcoming Pharma and Textile Park expected to drive PNG volume.
Diu and Somnath GA: is highlighting the upcoming Chhara LNG terminal that is expected to reduce transportation costs of CNG. The company operates 15 CNG stations here.
Namakkal and Tiruchirappalli GA: highlights five company-operated stations, besides the area having 6 industrial estates, one industrial complex, and also being a Hub for Transportation and Manufacturing of engineering goods, alongside being connected to 5 national highways.
As of October 9, 2023, IRMEL has established a network of 69 CNG filling stations including 2 CNG stations owned and operated by the company itself (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”).
To capitalize on synergetic business opportunities, the company has entered into a strategic and technical partnership with Shizuoka Gas Co. Ltd, Japan (“Shizgas”) – the fourth largest gas company in Japan by natural gas sales volume – by infusing capital through a private placement in IRMEL.
It has signed an MoU with Mindra EV Private Limited for setting up an electric vehicle charging infrastructure at DODO and COCO stations for a period of five years – with a vision 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 increase in sale of compressed natural gas, piped natural gas and increase in connection income and other operating revenue.
Profit After Tax (PAT) increased by 31.01% from Rs 20.54 crore in the same period as above. Revenue for fiscal 2023 grew 90.27% to Rs 1039.13 crore from Rs 546.14 crore for the financial year 2022.
