Indian city gas distribution company IRM Energy, backed by Cadila Pharma, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO). The company is engaged in laying, building, operating, and expanding natural gas distribution networks in local areas. The IPO comprises a complete fresh issue of shares worth up to 10,100,000 equity shares with a face value of Rs 10 per equity share. The offer also includes a reservation for a subscription by eligible employees.
The IPO will be made through the Book Building Process, with not more than 50% of the offer available for allocation to Qualified Institutional Buyers, not less than 15% of the offer available for allocation to Non-Institutional Bidders, and not less than 35% of the offer available for allocation to Retail Individual Bidders. The company may consider a Pre-IPO placement for up to 2,000,000 equity shares, in consultation with the lead bankers to the issue, and if completed, the issue size will be reduced accordingly.
The fresh issuance worth Rs 307.26 crores will be used towards funding capital expenditure requirements for the development of the City Gas Distribution network in the Geographical Areas of Namakkal and Tiruchirapalli (Tamil Nadu) in Fiscal 2024, 2025, and 2026, while Rs 167.50 will be used for prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company. The promoters own 67.94% of the shares of the Ahmedabad-based company, with the majority being held by Cadila Pharmaceuticals Limited (49.50%), and the remaining shares being held by IRM Trust Ltd. through its managing trustee, Dr. Rajiv Indravadan Modi.
IRM Energy Limited (IRMEL) started its operations in July 2017 and focuses on meeting the energy needs of customers in its geographical areas through its pipelines and CNG station network at a competitive price while maintaining high safety standards. According to a CRISIL report mentioned in the DRHP, the company provides PNG used by domestic households, as well as commercial and industrial units, and CNG for use in motor vehicles. It is also considered one of the safest, cleanest, and most cost-effective fuel providers for households, commercial establishments, industrial units, and transportation requirements.
IRM Energy Limited’s Operations Reach Across Multiple States in India As of September 30, 2022, IRM Energy Limited had established its presence in six Indian states, namely Gujarat, Punjab, Tamil Nadu, and the Union Territory of Daman and Diu. It serves over 200,000 customers, consisting of industrial, commercial, and domestic clients.
IRM Energy Limited Expands Business Reach Through Strategic Partnerships and Investments IRM Energy Limited has recently entered into a strategic and technical partnership with Shizuoka Gas Co. Ltd, the fourth-largest gas company in Japan, to explore synergistic business opportunities. Additionally, the company has invested in three Indian companies, Farm Gas Private Limited, Venuka Polymers Private Limited, and Ni Hon Cylinders Private Limited. Moreover, it has signed an MoU with Mindra EV Private Limited to establish an electric vehicle charging infrastructure at DODO Stations and COCO Stations.
IRM Energy Limited’s CNG Filling Station Network Continues to Expand As of September 30, 2022, IRM Energy Limited has 56 CNG filling stations across India, with two owned and operated by the company, 30 owned and operated by dealers, and 24 owned and operated by oil marketing companies.
IRM Energy Limited Competes with International and Domestic Players in the CGD Industry IRM Energy Limited faces competition from both international and domestic players in the City Gas Distribution (CGD) industry in India. International players include AG&P and Think Gas Distribution Private Limited from Singapore, and Adani Total Gas Limited, a partnership between Total Energies SE from France and Adani Gas Limited. Domestic players include Mahanagar Gas Limited, Indraprastha Gas Limited, and Gujarat Gas Company Limited.
IRM Energy Limited Reports Strong Revenue Growth in 2022 Despite Decreased Profit After Tax IRM Energy Limited’s revenue from operations increased significantly in the six months ended September 30, 2022, due to increased sales of compressed natural gas and piped natural gas, as well as higher connection income and other operating revenue. However, its profit after tax decreased due to higher input gas costs.
IRM Energy Limited Reports Impressive Revenue and Profit Growth for Fiscal 2022 In Fiscal 2022, IRM Energy Limited’s revenue grew by almost 158% and its profit after tax increased by over 266%, compared to the previous fiscal year.
CRISIL Report Predicts Strong Growth in Natural Gas Demand in India’s CGD Sector According to a CRISIL report, India’s natural gas consumption has been growing steadily, with the CGD sector expected to see a CAGR of 15-16% between Fiscals 2022 and 2030. Demand for compressed and piped natural gas is also expected to increase, driven by expansion in the gas network to more cities.
HDFC Bank Limited and BOB Capital Markets Limited to Manage IRM Energy Limited’s Equity Share Listing HDFC Bank Limited and BOB Capital Markets Limited have been appointed as book-running lead managers, while Link Intime India Private Limited will serve as the registrar for the equity shares of IRM Energy Limited, which are set to be listed on the Bombay Stock Exchange and the National Stock Exchange.
About IRM Energy:
IRM ENERGY LIMITED (a group Company of Cadila Pharmaceuticals Ltd.) is an integrated value driven energy enterprise developing Natural Gas distribution projects across various districts in the country for industrial, commercial, domestic, and automobile customers. The company is committed towards contributing to the energy need of its consumers.
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