The initial public offering of IRM Energy, the first mainboard IPO of the week, will open for subscription on Wednesday, October 18. The public issue closes on October 20, and the anchor investors allocation will be done later today.

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The company has fixed a price band of Rs 480-505 per share and investors can bid for a minimum of 29 shares in one lot and in multiples thereafter.

Ahead of the issue opening, market analysts say that shares of IRM Energy are commanding a premium of Rs 80 in the unlisted market.

The grey market is an unofficial platform wherein IPO shares can be bought and sold till the listing.

What should investors know?

Given the growing trend of industries transition from coal to natural gas, IRM Energy with a strong market presence, strategic alliances, robust financial and a well-defined growth strategy is self-confident to gain the substantial benefit from shift. Thus, Mehta Equities has recommended investors to 'Subscribe' to IRMEL IPO offer with a long-term perspective.

"We believe IRM Energy IPO gives investors an opportunity to invest in one of the growing and emerging player in city gas distribution segment in its GAs. Being backed by Cadila Pharmaceuticals, a well-established Indian multinational entity in the domestic pharmaceutical industry, provides a solid foundation to overcome various entry barriers. We think with the exclusivity distribution rights for CNG and PNG in specific GAs gives competitive edge and market control to IRMEL," the brokerage said.

The IPO comprises entirely a fresh issue of Rs 1.08 crore shares and there is no offer-for-sale component. The total offer size comes to about Rs 545 crore.

About 50% of the issue has been reserved for qualified institutional buyers, 15% for non-institutional investors and 35% for retail investors.

The company plans to spend Rs 307.26 crore for the development of the city gas distribution network in Namakkal and Tiruchirappalli in Tamil Nadu. IRM Energy will also use the proceeds to pay debt amounting to Rs 135 crore and the remaining funds will be used for general corporate purposes.

HDFC Bank and BoB Capital Markets are the book-running managers to the issue, while Link Intime is the registrar.

The share allotment is expected to be finalised on October 27, and the listing date is scheduled on October 31.

Financials, company overview

The company's revenue from operations rose 6% to Rs 245 crore for the June quarter, while net profit surged 31% to Rs 26.9 crore during the same period.

IRM Energy, a group Company of Cadila Pharmaceuticals Ltd, is an integrated value driven energy enterprise developing Natural Gas distribution projects across various districts in the country for industrial, commercial, domestic, and automobile customers.

Cadila Pharmaceuticals Limited is the flagship company of the Cadila group.

First Published:Oct 17, 2023 4:42 PM IST