IRM Energy Limited IPO

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IRM is a city gas distribution (“CGD”) company in India, with operations at Banaskantha (Gujarat), Fatehgarh Sahib (Punjab), Diu & Gir Somnath (Union Territory of Daman and Diu/Gujarat), and Namakkal & Tiruchirappalli (Tamil Nadu), engaged in the business of laying, building, operating and expanding the city or local natural gas distribution network.

They focus on meeting the energy needs of customers in geographical areas “GAs” through it’s pipelines and CNG station network at a competitive price, while maintaining high safety standards.

They have positioned themselves as the provider of one of the safest, cleanest and most cost-effective fuels for households, commercial establishments and industrial units as well as for fuel requirements in the transport segment.

Due to their competitive gas price and optimised operational expenditure, They can offer gas to PNG industrial customers at a viable price in the market and enable the PNG industrial customers to switch from other alternate fuels (coal and furnace oils) to natural gas.

They have authorizations for the GAs awarded for Banaskantha and Fatehgarh Sahib, in the sixth round of bidding conducted by the Petroleum and Natural Gas Regulatory Board (“PNGRB”) in July 2016.

They have also entered into certain gas transportation agreements (“GTAs”) for transportation of natural gas from suppliers pursuant to their GSPAs.

Natural gas demand from the CGD sector to log at 15-16% CAGR between Fiscal 2022 and Fiscal 2030, to 103-107 MMSCMD. (Source: CRISIL Report).

They have signed a memorandum of understanding (“MoU”) with Mindra EV Private Limited on August 24, 2022 for setting up an electric vehicle (“EV”) charging infrastructure at DODO Stations and COCO Stations for a period of five years and believe this will enable the creation of an efficient ecosystem for EV charging.

 

Objects of the IRM Energy Limited IPO:

The Offer comprises the Fresh Issue of Up to 10,100,000 Equity Shares :- (i) Funding capital expenditure requirements for 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. (ii) Prepayment or repayment of all or a portion of certain outstanding borrowings availed by IRM Energy. (iii) General corporate purposes.
DRHP of IRM Energy Limited IPO

IRM Energy Limited IPO Details:

Total Shares: 10,100,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Building
Listing At: NSE,BSE

Promoters And Management:

(i) Dr. Rajiv Indravadan Modi is one of the promoters of the company. He is the Chairman and Managing Director of the company. He holds a Bachelor of Technology in chemical engineering from Indian Institute of Technology, Bombay. He also holds a diploma in Biochemical Engineering from University College London and a degree of a Doctor of Philosophy (Biological Sciences) from University of Michigan. He is a fellow member at Indian National Academy of Engineering. He also serves as the Chairman of Board of Governors of IIT Guwahati and Chairperson of the Board of Governors of IIT Gandhinagar, Gujarat. (ii) Maheswar Sahu is a Non-Executive Director of our Company and the Chairman of the Board of Directors of our Company. He holds a Bachelor of Science degree in electrical engineering from Regional Engineering College, Rourkela. He also holds a Master of Social Science degree from the University of Birmingham. He joined Indian Administrative Service (IAS) in 1980.

Financials of IRM Energy Limited IPO:

Financials of IRM Energy
Particulars (Fig. In Cr.) 2022 2021 2020
Sales 546 211 165
Purchase of Stock-in -Trade 249 77 67
Excise Duty on Sale of Compressed Natural Gas 38 22 18
Employees Benefit Expenses 7 4 3
Other Expenses 65 35 26
EBITDA 189 74 50
OPM% 34.62% 35.07% 30.30%
Depreciation 15 12 9
Finance Cost 22 15 9
PBT 152 46 31
Tax 38 11 10
PAT 128 34 20
NPM% 23.44% 16.11% 12.12%

Comparison With Peers:

Name of the Company Revenue (Cr) Profit (Cr) EPS P/E CMP
Mcap (Cr)
IRM Energy (IPO) 507 128 43.88 N/A N/A N/A
Gujarat Gas 16456 1287 18.7 27.71 489 33,673
Indraprastha Gas 7709 1,502 21.46 20.38 419 29,316
Mahanagar Gas 3560 596 60.43 14.6 842 8,316
Adani Total Gas 3037 5,094 4.63 798.03 3,657 4,02,184

Recommendation on IRM Energy Limited IPO:

To be updated once IRM Energy files for RHP.

Registrar of IRM Energy Limited IPO:

  1. Link Intime India Private Limited

Discussion on IRM Energy Limited IPO:

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