IRM Energy
Book Building issueMainboard₹545 Cr issue
-5.15%
Listing gain over issue price
Issue size
₹545 Cr
1 lot at cut-off
₹14,645
Lot size
29shares
Open
18 Oct 2023
Close
20 Oct 2023
Allotment
27 Oct 2023
Listing
26 Oct 2023
Listing performance
Issue price
₹505
Listed at
₹479
Listing-day close
₹473.15
Latest price
₹231.45
Close on 23 Oct 2026
Listing gain
-5.15%
Return since issue
-54.17%
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 18 Oct 2023 – 20 Oct 2023
- Listing date
- 26 Oct 2023
- Face value
- ₹10 per share
- Issue price
- ₹505 per share
- Lot size
- 29 shares
- Issue type
- Book Building issue
- Total issue size
- ₹545 Cr
- Market cap at offer price
- ₹2,074 Cr
- Promoter holding
- 67.94% → 50.07% pre-issue → post-issue
- ISIN
- INE07U701015
- Registrar
- MUFG Intime India Pvt.Ltd.
- Lead managers
- HDFC Bank Ltd.
- Registered office
- 4th Floor, Block 8, Magnet, Corporate Park, Near Sola Bridge, S.G.Highway, Gujarat
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 31,75,200 | — | — |
Application size
Minimum 29 shares per lot, in multiples, at ₹505
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 29 | ₹14,645 |
| Retail (max) | 13 | 377 | ₹1,90,385 |
| S-HNI (min) | 14 | 406 | ₹2,05,030 |
| S-HNI (max) | 68 | 1,972 | ₹9,95,860 |
| B-HNI (min) | 69 | 2,001 | ₹10,10,505 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Shares allocated
31,75,200
Anchor portion
₹160 Cr
at ₹505 per share
Valuation and performance
Valuation at offer price
₹505 per share
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 20.93 | — |
| P/E (×) | 24.13 | — |
| Market cap | — | ₹2,074 Cr |
Key performance indicators
Latest reported period
- Return on net worth
- 18.23%
- ROCE
- 14.19%
- Debt / equity
- 0.93
- NAV per share
- ₹114.48
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About IRM Energy
IRM Energy Limited (formerly IRM Energy Private Limited) is incorporated in India and operates as a city gas distribution entity authorized by the Petroleum and Natural Gas Regulatory Board (PNGRB). The company distributes CNG and PNG to domestic, commercial, and industrial consumers across four geographical areas: Banaskantha (Gujarat), Fatehgarh Sahib (Punjab), Diu & Gir Somnath (Gujarat), and Namakkal & Tiruchirappalli (Tamil Nadu). As of June 30, 2023, the company operated 66 CNG filling stations and served 52,454 PNG domestic connections along with commercial and industrial customers. The company earns revenue from the sale of CNG and PNG, compression income, other operating revenues, and natural gas trading. The company also holds investments in joint ventures including FertiGas (CBG manufacturing), Ni Hon Cylinders (CNG/PNG vehicles), Venuka Polymers (PVC/HDPE pipes), and SKY (renewable energy).
Company Analysis
from RHPIRM Energy Limited is a city gas distribution company that distributes compressed natural gas (CNG) and piped natural gas (PNG) across four geographical areas in India, also engaging in natural gas trading.
IRM Energy Limited (formerly IRM Energy Private Limited) is incorporated in India and operates as a city gas distribution entity authorized by the Petroleum and Natural Gas Regulatory Board (PNGRB). The company distributes CNG and PNG to domestic, commercial, and industrial consumers across four geographical areas: Banaskantha (Gujarat), Fatehgarh Sahib (Punjab), Diu & Gir Somnath (Gujarat), and Namakkal & Tiruchirappalli (Tamil Nadu). As of June 30, 2023, the company operated 66 CNG filling stations and served 52,454 PNG domestic connections along with commercial and industrial customers. The company earns revenue from the sale of CNG and PNG, compression income, other operating revenues, and natural gas trading. The company also holds investments in joint ventures including FertiGas (CBG manufacturing), Ni Hon Cylinders (CNG/PNG vehicles), Venuka Polymers (PVC/HDPE pipes), and SKY (renewable energy).
Objects of the Issue
- 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 (from December 1, 2023 to March 31, 2024), Fiscal 2025, Fiscal 2026 and Fiscal 2027 (from April 1, 2026 to September 30, 2026) ₹3,072.62 million p.106
- Prepayment or repayment of all or a portion of certain outstanding borrowings availed by our Company ₹1,350.00 million p.106
- General corporate purposes p.106
- Not specified in this document section
- Repayment of borrowings p.101
- Funding capex for expansion of gas distribution network p.101
- General corporate purposes p.101
- Objects of the Issue — specific purposes for which proceeds are being raised p.419
Issue Structure
- Total Issue
- Up to 10,800,000 Equity Shares, aggregating up to ₹ [●] million
- Fresh Issue
- Up to 10,800,000 Equity Shares
- Price Band
- [●]
- Lot Size
- Minimum Bid Lot (unspecified in this part)
- Face Value
- ₹10 per Equity Share
Business Model
The company earns revenue through the distribution and sale of CNG and PNG to customers in its authorized geographical areas. Revenue sources include CNG sales, PNG sales (domestic, commercial, and industrial segments), compression income, other operating revenues, and natural gas trading. The cost of natural gas is fixed under government Pricing Guidelines for CNG and PNG domestic segments, while industrial and commercial PNG pricing is linked to RLNG procurement costs. In Fiscal 2023, net revenues from operations were ₹9,800.89 million, with gross margin of ₹2,003.12 million.
Business Segments
Distribution of compressed natural gas through CNG filling stations to customers. As of June 30, 2023, the company operated 66 CNG filling stations across its geographical areas.
Distribution of piped natural gas to domestic, commercial, and industrial consumers. Includes domestic PNG, commercial PNG, and industrial PNG segments.
Trading of natural gas in the market.
Supply of compressed natural gas to automobiles through CNG stations
Supply of piped natural gas to domestic, commercial, and industrial customers through pipeline networks
Supply of compressed natural gas for use as fuel in motor vehicles, including public transport vehicles (taxis, auto-rickshaws, buses), private vehicles (cars, light goods vehicles, heavy goods vehicles)
Supply of piped natural gas to households predominantly using PNG as cooking gas
Supply of piped natural gas to commercial establishments such as hotels, restaurants, bakeries, hostels and community halls
Supply of piped natural gas to small, medium and large-sized enterprises for industrial use
Trading of natural gas on various platforms including Indian Gas Exchange (IGX)
Supply of compressed natural gas to public transport vehicles (taxis, auto-rickshaws), private vehicles (cars, buses, light and heavy goods vehicles) through a network of 61 CNG stations and 238 CNG dispensing points spread across Gujarat, Punjab, Diu-Gir Somnath and adjoining areas (as of March 31, 2023). CNG offers price and mileage advantage over petrol, diesel and auto LPG.
Distribution of PNG to small, medium and large-sized enterprises. Major segment served is steel re-rolling mills. Also supply gas to forging industries, dairy industries, bakeries and food and beverage industries as a substitute for furnace oil, coal, diesel, LPG and light diesel oil. Customers include 184 industrial PNG customers as of Q1 FY2024.
Distribution of PNG to commercial establishments such as hotels, restaurants, bakeries, hostels and community halls, positioned as an eco-friendly substitute for LPG, diesel and wood. 269 commercial PNG customers as of Q1 FY2024.
Supply of PNG to domestic customers located within operational GAs, predominantly for cooking gas. Price benchmarked to subsidized LPG cylinders. Provides uninterrupted supply without hassle of booking or changing cylinders. 52,454 domestic PNG customers as of Q1 FY2024.
Supply of natural gas (CNG and PNG) to domestic, commercial, industrial, and non-commercial customers in authorized geographical areas
Retail distribution of CNG to vehicles and commercial customers through CNG stations
Distribution of PNG to industrial, commercial, and domestic customers through pipeline network
Supply of natural gas through pipelines to domestic and commercial customers at city gate stations in authorized geographical areas
Supply of compressed natural gas to vehicles through a network of CNG filling stations operated under COCO, DODO and OMC models
SWOT Analysis
Strengths
- • Established CGD operations across multiple geographical areas with proven infrastructure development capability(p.21)
- • Substantial expansion of pipeline infrastructure demonstrating execution capability(p.28)
- • Diversified customer base across CNG, domestic PNG, commercial PNG and industrial PNG segments(p.41)
- • Strong promoter backing with established industrial conglomerate ownership(p.1)
- • Geographic diversification across multiple authorized distribution areas with established operations(p.51)
- • Strong revenue growth trajectory with significant volume expansion in PNG segment(p.51)
- • Substantial infrastructure exclusivity period securing long-term market position(p.59)
- • Diversified customer base across CNG, PNG domestic, commercial and industrial segments(p.78)
- • Improved financial metrics with positive operating cash flows and growing profitability(p.52)
- • Exclusive authorization for CGD operations in awarded geographical areas(p.140)
- • Successful track record developing and operating CGD business across multiple regions(p.140)
- • Diversified customer base with established distribution network(p.140)
- • Strong parentage and experienced management team(p.140)
- • Significant volume growth in recent years(p.142)
- • Promoter holdings at 67.94% of pre-Issue capital provide strong backing(p.98)
- • Established presence across four GAs with successful infrastructure development exceeding MWP targets(p.183)
- • Strong financial growth trajectory with high volume and revenue CAGR(p.210)
- • Infrastructure and marketing exclusivity providing competitive barriers in GAs(p.207)
- • Diversified gas sourcing strategy with mid to long-term contracts and access to multiple benchmarks(p.194)
- • Strong parentage from established pharmaceutical multinational providing financial support and management expertise(p.209)
- • Strategic geographic positioning with connectivity to major cross-country gas pipelines(p.210)
- • Technology adoption and automation reducing operational costs and improving efficiency(p.210)
- • Balanced revenue model transitioning from CNG to PNG as penetration deepens(p.193)
- • Pioneer in SCADA technology for unmanned CNG operations(p.212)
- • Established technology adoption and operational efficiency methodologies(p.212)
- • Strategic partnership with Japan-based ShizGas for technical expertise(p.212)
- • Strong industrial customer base with high growth in steel re-rolling segment(p.215)
- • CNG sales growth momentum with 60.33% year-on-year increase(p.213)
- • Established 24/7 PNG call centre and real-time monitoring capabilities(p.221)
- • Established city gas distribution presence in multiple states(p.294)
- • Strong revenue growth trajectory(p.286)
- • Profitable operations with positive net profit(p.286)
- • Experienced management team with industry expertise(p.264)
- • Diversified revenue streams from natural gas distribution(p.362)
- • Strong revenue growth across multiple periods(p.364)
- • Significant expansion in piped natural gas customer base(p.349)
- • Improved operational cash generation(p.371)
- • Access to multiple sources of natural gas supply(p.348)
- • Exclusive geographic area authorizations from PNGRB with long-term exclusivity periods(p.394)
- • Established operational infrastructure across multiple geographic areas with city gate stations and CNG networks(p.396)
- • Diversified revenue model operating across city gas distribution (PNG), CNG, and related services(p.394)
Weaknesses
- • High dependence on limited number of natural gas suppliers creating supply concentration risk(p.37)
- • Significant contingent liabilities relative to net worth, primarily performance bank guarantees to PNGRB(p.24)
- • Heavy reliance on CNG and industrial PNG operations with limited domestic PNG penetration(p.24)
- • Delays in meeting PNGRB Minimum Work Permit targets in established geographical areas(p.44)
- • Promoter involvement in multiple ongoing litigations including criminal and regulatory proceedings(p.49)
- • Significant outstanding borrowings with restrictive covenants limiting operational flexibility(p.48)
- • High dependence on independent third parties for CNG station operations and revenues(p.52)
- • Significant concentration of revenue in Fatehgarh Sahib GA creating geographic concentration risk(p.51)
- • Marketing exclusivity expiration reducing sole distributor status in key markets(p.59)
- • Capital-intensive business model requiring substantial long-term capital expenditure commitments(p.60)
- • Outstanding litigation involving promoters creating reputational and financial risks(p.57)
- • Reliance on related party agreements and transactions including license fees to promoter(p.60)
- • High customer concentration risk with limited diversification(p.31)
- • Significant debt obligations requiring servicing(p.133)
- • Capital-intensive business model requiring continuous significant expenditure(p.107)
- • Limited order placement for planned capital expenditure(p.132)
- • Dependence on HDFC Bank term loan facility with 48-hour repayment on demand clause(p.108)
- • Recently expired marketing exclusivity in mature GAs exposing to competition(p.208)
- • Heavy reliance on LNG imports for non-priority sector supply creating margin volatility(p.204)
- • Limited industrial customer base relative to total operations(p.210)
- • Significant capital requirements for network expansion in new GA of Namakkal and Tiruchirappalli limiting near-term profitability(p.191)
- • Dependence on few major gas suppliers for CNG and PNG sourcing(p.212)
- • Geographic concentration of operations in select GAs limits diversification(p.213)
- • Heavy dependence on PNGRB authorization and regulatory compliance(p.212)
- • Significant capital requirements for infrastructure development(p.217)
- • Significant debt burden with rising borrowings(p.284)
- • Concentration of shareholding with promoter group control(p.268)
- • Limited geographic diversification with operations concentrated in few districts(p.294)
- • Reliance on related party transactions for services(p.271)
- • High dependence on gas procurement costs affecting profitability(p.365)
- • Significant decline in profit before tax year-over-year(p.368)
- • High financial leverage with increasing debt obligations(p.373)
- • Substantial capital commitments creating cash flow pressure(p.374)
- • Exposure to contingent liabilities through corporate guarantees(p.374)
- • Dependence on related party transactions for a material portion of revenue(p.375)
- • Significant promotional litigation burden with multiple drug quality and compliance-related criminal cases(p.383)
- • Substantial tax liabilities and disputed assessments against promoter company with exposure exceeding ₹900 million(p.392)
- • High financial leverage with total borrowings of ₹3,212.41 million and debt-to-equity ratio of 0.86(p.378)
- • Dependence on external gas supply from third parties with exposure to commodity price volatility(p.376)
Opportunities
- • High projected demand growth in CGD sector over forecast period(p.21)
- • Expansion into new Tamil Nadu geographical areas with significant infrastructure development plan(p.44)
- • Expected increase in domestic PNG penetration through network expansion(p.21)
- • Potential for acquisition of additional licensed geographical areas from peer CGD entities(p.50)
- • Expansion into new geographical areas through additional PNGRB authorizations(p.61)
- • Allocation of gas from difficult fields at competitive prices through PNGRB bidding process(p.53)
- • Development of green energy businesses through subsidiary expansion(p.53)
- • Growing demand for natural gas driven by favorable government initiatives and energy transition policies(p.62)
- • Revision of domestic natural gas pricing guidelines creating favorable cost structure(p.53)
- • Technology adoption opportunities to improve operational efficiency and customer experience(p.63)
- • Expansion into new geographical areas with CGD authorization(p.106)
- • Growth in domestic PNG connections and consumer base(p.129)
- • Enhanced brand visibility and market position through listing(p.106)
- • Development of multiple station types to serve diverse customer segments(p.107)
- • Improved leverage and balance sheet strength enabling future growth financing(p.134)
- • Exceptional demand growth potential in Namakkal and Tiruchirappalli GA with highest population and vehicle registration(p.202)
- • Strong projected CGD sector growth driven by government policy and clean fuel mandates(p.204)
- • NGT mandate driving industrial PNG adoption in Mandi Gobindgarh cluster(p.204)
- • Upcoming LNG terminal infrastructure in Chhara reducing transportation costs in Diu & Gir Somnath GA(p.189)
- • Strategic partnership with ShizGas enabling access to international expertise and wholesale LNG sourcing(p.193)
- • Backward integration opportunities through joint ventures in CBG and pipe manufacturing(p.193)
- • Emerging opportunities in boat conversion to CNG leveraging 8,000 fishing boats in Diu & Gir Somnath(p.189)
- • Vertical integration into renewable energy and biogas through allied investments(p.212)
- • CBG and renewable energy market expansion through Farm Gas subsidiary(p.212)
- • LNG import and wholesale opportunities with ShizGas partnership(p.212)
- • Expansion into renewable energy and green hydrogen markets(p.212)
- • Growth in domestic PNG connections with affordable schemes(p.216)
- • Expansion of in-house PE pipeline supply through Venuka Polymers(p.212)
- • Expansion into newly awarded CGD geographical areas in Tamil Nadu(p.294)
- • Growth potential from increasing natural gas demand and city gas distribution expansion(p.294)
- • Diversification into joint ventures in complementary businesses(p.296)
- • Expansion of customer base in priority sector allocations(p.348)
- • Volume growth potential in piped natural gas for domestic customers(p.368)
- • Opportunity to pass through increased input costs to customers(p.364)
- • Capital expenditure to expand infrastructure and network reach(p.375)
- • Growth in compressed natural gas sales volumes(p.364)
- • Planned expansion into additional geographic areas with new authorizations in Tamil Nadu(p.398)
- • Government of India's focus on promoting natural gas as a cleaner fuel alternative(p.372)
- • Growing CNG and PNG infrastructure network with opportunity to expand retail CNG station network(p.398)
Threats
- • Disruption risks from dependence on third-party natural gas suppliers and transportation infrastructure(p.37)
- • Hazardous nature of natural gas transportation creating operational and safety risks(p.38)
- • Regulatory risk from evolving natural gas pricing guidelines and allocation policies(p.50)
- • Long gestation period for revenue generation in new geographical areas creating cash flow timing risk(p.42)
- • Construction and commissioning delays in pipeline expansion subject to multiple external factors(p.44)
- • Risk of adverse regulatory action for non-compliance with multiple licenses and approvals requirements(p.42)
- • Directors serving on boards of delisted and suspended traded companies creating governance concerns(p.24)
- • Fluctuations in domestic gas pricing and availability creating input cost volatility(p.59)
- • Post-exclusivity period competition from other CGD operators reducing market share and margins(p.55)
- • Foreign exchange fluctuation exposure impacting profitability due to USD-denominated costs(p.62)
- • Risk from alternative energy sources and electric vehicle adoption reducing natural gas demand(p.62)
- • COVID-19 pandemic and similar public health threats disrupting operations and supply chains(p.58)
- • Regulatory changes in taxation, labor laws and industry regulations increasing compliance costs(p.67)
- • General macroeconomic slowdown in India adversely affecting energy demand and economic conditions(p.67)
- • Delays in construction and commissioning of gas distribution pipelines(p.38)
- • Regulatory changes and government approvals requirements(p.132)
- • Price fluctuations in natural gas input costs(p.142)
- • Risks from variations in capital expenditure estimates and supplier performance(p.107)
- • Dependence on quotations and purchase orders that may not be finalized(p.113)
- • Volatile LNG pricing impacting margins on industrial and commercial PNG segments(p.198)
- • Post-exclusivity period competition from other CGD operators in established GAs(p.196)
- • Risk of demand destruction from alternative fuels and emerging energy technologies(p.198)
- • Limited availability of domestic natural gas supply forcing dependence on imported LNG(p.197)
- • Regulatory and policy changes impacting margins, exclusivity rights or imposing unexpected compliance burdens(p.198)
- • Risk of not meeting MWP targets triggering penalty encashment of performance bond guarantee(p.172)
- • Subsidy-driven LPG competition reducing PNG domestic segment conversion rates(p.198)
- • Low CNG adoption due to reduced fuel cost savings when gas prices rise relative to petrol(p.198)
- • Intense competition from larger CGD players and foreign investors(p.216)
- • Dominant market position of top CGD players constrains growth(p.216)
- • Regulatory delays and time over-runs in meeting PNGRB minimum work programme targets(p.237)
- • Exposure to natural gas price volatility and input cost fluctuations(p.212)
- • Regulatory and compliance burden from PNGRB technical standards and safety regulations(p.220)
- • Risk of inability to assure dividend payments to shareholders(p.275)
- • Dependence on regulatory approvals and PNGRB authorization(p.294)
- • Restrictive covenants in financing arrangements limiting dividend capacity(p.275)
- • Volatility in natural gas allocation and pricing by government(p.348)
- • Potential disruptions in gas supply infrastructure(p.348)
- • Competition from alternate fuels affecting piped natural gas demand(p.364)
- • Rising input gas costs impacting margins(p.367)
- • Dependence on limited domestic natural gas availability(p.348)
- • Regulatory changes and potential revocation of PNGRB authorizations affecting operational exclusivity(p.395)
- • Foreign exchange risk from USD-denominated gas purchase costs impacting profitability(p.376)
- • Inflation volatility impacting operational costs and business economics(p.376)
- • Interest rate risk from floating-rate debt obligations sensitive to market rate movements(p.376)
- • Restrictive covenants from lenders limiting operational and financial flexibility(p.380)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Cadila Pharmaceuticals Limited | Promoter | 49.50% | — |
| IRM Trust | Promoter | 18.44% | — |
| Enertech Distribution Management Private Limited (EDMPL) | Promoter Group | — | — |
| Cadila Pharmaceuticals Limited | Promoter | 49.50% | — |
| IRM Trust | Promoter | 18.44% | — |
| Cadila Pharmaceuticals Limited (CPL) | Promoter | 49.50% | — |
| IRM Trust | Promoter/Promoter Group | 18.48% | — |
| Cadila Pharmaceuticals Limited | Promoter | 49.50% | — |
| IRM Trust | Promoter | 18.44% | — |
| Dr. Rajiv Indravadan Modi | Promoter/Promoter Group | 18.44% | — |
| Cadila Pharmaceuticals Limited | Corporate Promoter | 34,999,432 RPS Shares | — |
| IRM Trust | Promoter Trust | — | — |
| Dr. Rajiv Indravadan Modi | Promoter | — | — |
| Cadila Pharmaceuticals Limited | Corporate Promoter | — | — |
| IRM Trust | Promoter | — | — |
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.
IRM Energy IPO FAQs
What is the lot size of IRM Energy IPO?
The minimum lot size of IRM Energy IPO is 29 shares. One lot costs ₹14,645 at the cut-off price.
When does IRM Energy IPO open and close?
IRM Energy IPO opened for subscription on 18 Oct 2023 and closed on 20 Oct 2023.
What is the listing date of IRM Energy IPO?
IRM Energy IPO listed on 26 Oct 2023.