IRM Energy Limited

About IRM Energy Limited

Incorporated in 2015, IRM Energy Limited is a city gas distribution (CGD) company that operates in cities like Gujarat, Punjab, Daman and Diu, and Tamil Nadu. In July 2017, the company received its first license from the Petroleum and Natural Gas Regulatory Board (PNGRB) to lay, build, operate and expand the city or local natural gas distribution network.

It sources natural gas from suppliers such as Gas Authority of India Limited (GAIL) and Reliance Industries Limited (RIL). Moreover, it has subscribed to a proprietary membership from the Indian Gas Exchange allowing access to the natural gas free market, where a free exchange mechanism discovers prices.

This natural gas is then supplied to its customers, which include operators of public transport vehicles such as taxis, auto-rickshaws, and private vehicles such as cars, buses, light goods vehicles and heavy goods vehicles for CNG. On the other hand, its PNG customers are classified as industrial PNG, commercial PNG such as hotels, bakeries etc, and domestic PNG.

As of 30 June 2023, the company covers 3,898 inch-km of supply network and 66 CNG filling stations. It also handled a combined total volume of 196 MMSCM (Million Metric Standard Cubic Meter) in FY23.

In the last three years, it saw a CAGR rise of over 69% in its revenue from operations and EBITDA margins of 38%, 39% and 12% in FY21, FY22 and FY23 respectively. Additionally, the natural gas demand from the CGD sector is expected to grow at a CAGR of 19% to 20% between FY22 and FY30, which could benefit the company. 

And now, IRM Energy Limited is coming out with its initial public offer (IPO). The entire IPO will be a fresh issue. The money raised through the fresh issue will be utilised to repay borrowings, fund the development of the city gas distribution network in the geographical areas of Tamil Nadu and for general corporate purposes. Its shares will be listed on the NSE and the BSE.   

Here are key details about the IRM Energy Limited IPO:

 Financial snapshot

Here’s a quick look at IRM Energy Limited IPO’s strengths, weakness, opportunities and risks (SWOT analysis)

Strengths and opportunities

1. Holds sole distributor exclusivity in the geographical areas (GA) awarded to supply CNG and PNG. It also has network exclusivity rights of 25 years for infrastructure creation for all its GAs.
2. Diverse customer portfolio and distribution network with 184 industrial customers, 269 commercial customers and 52,454 domestic customers as of 30 June 2023. 
3. IRM Energy is backed by the strong parentage of Cadila Pharmaceuticals Limited, which holds 49.50% of its equity shares. 
4. Strategically acquired GAs with connectivity to cross-country natural gas pipelines within the GA boundary such as GAIL’s Dadri-Bawana Nangal gas pipeline, which passes through Fatehgarh Sahib. This helps in sourcing gas in a cost-effective manner. 
5. Consistent track record of growth wherein its volume of supplied natural gas increased at a CAGR of 46% between FY21 and FY23.

Risks and threats

1. 100% dependent on third parties for sourcing and transportation of natural gas. 
2. Heavily reliant on CNG and industrial PNG supply operations, they accounted for 42% and 54% of its total operations in FY23.
3. Typically, it requires 15-18 months to generate revenue in its GAs.
4. Has a total outstanding borrowing of ₹283 crore as of FY23.
5. Dependent on government policies for allocation of natural gas and cost of gas supplied for its CNG and domestic PNG customers. 
6. Dependent on the PNGRB authorisation to set up city gas distribution network.
7. Might face competition post-marketing exclusivity from existing players that operate in the same industry. 

IRM Energy Limited IPO details

|IRM Energy Limited IPO date

According to the offer document filed by the company with the SEBI, the IRM Energy IPO’s opening date – in other words, the IRM Energy IPO launch date – will be 18th October 2023. The IRM Energy IPO closing date is 20th October 2023. After this, investors will be updated about the allotment status on 26th October 2023.

Investors, who have been allotted shares, can expect them to be credited to their demat account on 30th October 2023. The IRM Energy IPO listing date is 31st October 2023. The listing date is the date on which the shares of a company get listed on the bourses – NSE and BSE. 

|IRM Energy Limited IPO Price Band

The entire IPO a fresh issue. The IRM Energy IPO price band has been set between ₹480 and ₹505 per share. Interested investors can choose a price within this band to apply for the IPO. 

The IRM Energy IPO listing price will be determined on 31st October 2023. The listing price is the price at which a company’s shares debut on the stock exchanges.

|IRM Energy Limited IPO Lot size

The IRM Energy IPO details have been declared. The IRM Energy IPO lot size is set at 29 shares and an investor can apply for a minimum of 1 lot. Meanwhile, the IRM Energy IPO issue size is approx ₹544 crore. 

How to pre-apply for the  IRM Energy Limited IPO?

You can pre-apply for the IRM Energy Limited IPO on Upstox. The pre-application for this IPO, which means pre-apply open date, usually begins a day before the IPO opens for subscription. 

Follow these steps to pre-apply for the IPO: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘IRM Energy Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Pre-Apply’
7. Accept the mandate on your UPI app

How to apply for the IRM Energy Limited IPO?

If you are interested in this investment opportunity but unsure how to apply for the IRM Energy Limited IPO, here we are listing out the steps for you. 

When the public issue opens for subscription, one can follow this step-by-step guide on how to apply for the IRM Energy Limited IPO on Upstox: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘IRM Energy Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

How to check the IRM Energy Limited IPO allotment status?

When the allotment process is completed, you can check the status of your application on the Upstox app. Share allotment is generally done around five to six days after an IPO closes. 

Here’s a step-by-step guide on how to check the IRM Energy Limited IPO allotment status:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover page, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, you will find the ‘View all’ option
5. Once you click on ‘View all’, you will be directed to the ‘IPO’ tab
6. In the ‘IPO’ tab, click on ‘My applications’ 
7. In ‘My applications’, under the History section, your IRM Energy Limited IPO allotment status will be mentioned

Check Allotment Status

Open a demat account with Upstox to apply for the IRM Energy Limited IPO

To apply for the IRM Energy Limited IPO, you need to mandatorily have a demat account. A demat account helps you hold the shares you buy in a dematerialised format. If you don’t have a demat account yet, you can open one with Upstox by visiting our website or by downloading the app.

Here is a step-by-step guide on how to open a demat account with Upstox:

1. Click here to visit the demat account opening page on the Upstox website. 
2. Enter your phone number and other essential details to begin opening a demat account.
3. Upload the scanned copies of your PAN, Aadhaar card, a cancelled cheque, and your bank statement as needed. 
4. Complete the e-verification using the OTP sent to your registered mobile number. 

This is all it takes to open a demat account with Upstox. Easy and quick, right? 

Open Demat Account