City gas distribution company IRM Energy Ltd has filed preliminary papers with capital markets regulator Sebi to raise funds through an initial public offering (IPO).

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The public issue is a complete offer-for-sale (OFS) of up to 1.01 crore equity shares by existing shareholders, according to the draft red herring prospectus (DRHP).

The Ahmedabad-based company may consider a pre-IPO placement for up to 20 lakh equity shares. If such placement is completed, the issue size will be reduced.

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At present, the promoters own 67.94 per cent stake in the company, with the majority being held by Cadila Pharmaceuticals (49.50 per cent), and the remaining shares being held by IRM Trust Ltd through its managing trustee Rajiv Indravadan Modi.

IRM Energy provides piped natural gas (PNG) and compressed natural gas (CNG). It has operations in states including Gujarat, Punjab and Tamil Nadu and serves 168 industrial customers, 202 commercial customers, 43,183 domestic customers, as of September 2022.

It had an established network of 56 CNG filling stations, comprising two owned and operated by the company, 30 owned and operated by dealers and 24 owned and operated by oil marketing companies as of September 2022.

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The company's revenue from operations more than doubled to Rs 504.12 crore in the six months ended September 30, 2022 from Rs 205.45 crore in the year-ago period.

Its profit after tax dropped 17.91 per cent to Rs 39.25 crore in the six-month period from Rs 47.81 crore a year ago due to higher input gas costs.

HDFC Bank and BOB Capital Markets are the book-running lead managers to the issue. Equity shares of the company are proposed to be listed on BSE and NSE.

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