IRM Energy IPO Subscription Day 1: The public issue of IRM Energy opens for subscription today; Should you buy?
IRM Energy IPO Subscription Day 1: The public issue of IRM Energy is now open for subscription. Ahead of the public issue, IRM Energy shares’ GMP rose to 13.27%. The bidding for anchor investors concluded on Tuesday, wherein the company collected Rs 160.35 crore.
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IRM Energy IPO: Dates
The offer will open for subscription on October 18 and close on October 20, 2023.
IRM Energy IPO: Price Band
The Gujarat-based city gas distribution company has fixed the price band at Rs 480-505 per share.
IRM Energy IPO: Offer Details
IRM Energy plans to raise Rs 545.4 crore through the IPO, which is a pure fresh issue of 1.08 crore shares and there is no offer-for-sale component.
IRM Energy IPO: Objectives
IRM Energy plans to spend Rs 307.26 crore for the development of the city gas distribution network in Namakkal and Tiruchirappalli in Tamil Nadu. The company will also use the proceeds to pay debt amounting to Rs 135 crore and the remaining funds will be utilised for general corporate purposes.
IRM Energy IPO: Lot size
Investors can bid for a minimum of 29 equity shares and in multiples of 29 thereafter. Hence, the minimum investment by retail investors will be Rs 13,920. At the upper end, the bidding amount will increase to Rs 14,645.
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IRM Energy IPO: Company Profile
IRM Energy operates in Banaskantha (Gujarat), Fatehgarh Sahib (Punjab), Diu & Gir Somnath (Union Territory of Daman and Diu/Gujarat), and Namakkal and Tiruchirappalli in Tamil Nadu. The company distributes CNG for use in motor vehicles and PNG for use by domestic households as well as for commercial and industrial units.
IRM Energy IPO listing date and allotment details
Tentatively, IRM Energy’s IPO basis of allotment of shares will be finalised on Friday, October 27 and the company will initiate refunds on the same day, while the shares will be credited to the demat account of allottees on Monday, October 30. IRM Energy IPO shares are likely to be listed on BSE and NSE on Tuesday, October 31. If in case, the company decides to switch to T+3 norm, the dates will get preponed.
Lead Manager and Registrar of IRM Energy Limited IPO:
The book-running lead managers of the IRM Energy IPO are Hdfc Bank Ltd and Bob Capital Markets Ltd, and the registrar is Link Intime India Private Ltd.
IRM Energy IPO reservation:
IRM Energy IPO has reserved not more than 50% of the shares in the public issue for Qualified Institutional Buyers (QIB), not less than 15% for Non Institutional Investors (NII), and not less than 35% of the offer is reserved for Retail Investors. A discount of Rs 48 per equity share is being offered to eligible employees bidding in the employee reserve portion.
IRM Energy IPO GMP today:
IRM Energy Limited IPO GMP today or grey market premium is +70. This indicates IRM Energy share price were trading at a premium of Rs 70 in the grey market on Tuesday, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of IRM Energy share price was indicated at Rs 575 apiece, which is 13.86% higher than the IPO price of Rs 505.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
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What Should Investors Do?
Compared with competitive fuels, IRM Energy provides a more reliable and environmentally friendly alternative fuel to all their customer segments and hence have been able to tap potential customer segments in the respective Gas, according to analysts at Anand Rathi.
“On the valuation front, we believe that the company is fairly priced. Thus, we recommend a “Subscribe – Long Term” rating for the IPO,” analysts said.
Reliance Securities said: “IRM key GA is lucrative and underpenetrated with strong volume growth expected to reach 1.51 mmscmd from the current FY23 volume of 0.54 mmscmd. The government’s focus on transition to a gas-based economy, development of the natural gas grid connecting the major demand and supply centers in India and increasing the natural gas share in the energy mix to 15% by FY2030 from 6.3% in FY23 will keep the structural story intact. IRM’s diverse customer portfolio and distribution network of CNG and PNG and strong relationships through collaborative efforts to a diverse customer base including industrial, commercial and domestic customers ensures efficient and optimal business mix going ahead. The consistent growth in volumes of its key GA, new business from Tamil Nadu which is a key market going forward we recommend a SUBSCRIBE to the issue for the long term.”
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