IRM Energy stock lists at 5.5% discount to IPO price

Shares of IRM Energy got listed at a discount of over 5% to the issue price on Thursday. The stock debuted at Rs 477.2 on NSE as against an offer price of Rs 505, translating into a discount of 5.5%. Meanwhile, on BSE, it was listed at Rs 479, down 5.15%.

Ahead of the listing, the company’s shares traded at a premium of Rs 35 in the unlisted market.

Analysts said while IRM Energy is still an early-stage company, it has a diversified customer portfolio, distribution network, and strong customer relationships. Additionally, the IPO was priced fairly.

The IPO, which was completely a fresh equity issue of 1.08 crore shares, received a healthy subscription of 27.05 times at close.

IRM Energy is a city gas distribution company in India, with operations in Gujarat, Punjab, the Union Territory of Daman and Diu, and Tamil Nadu.

The company is engaged in laying, building, operating and expanding the city or local natural gas distribution network. It is an integrated value-driven energy enterprise, developing natural gas distribution projects in the geographical areas allotted to it for industrial, commercial, domestic and automobile customers.

Natural gas demand from the CGD sector is expected to log at 19-20% CAGR between FY22 and FY30.The company sees growth potential in and around the geographical areas it operates in due to the expected growth in the number of CNG-equipped vehicles, potential growth in the number of households in its areas of operation and the presence of industrial clusters in Mandi Gobindgarh (Fatehgarh Sahib) and in Namakkal & Tiruchirappalli.

Net proceeds from the issue will be used for funding capital expenditure requirements for the development of the city gas distribution network in the geographical areas of Namakkal and Tiruchirappalli (Tamil Nadu), repayment of debt and other general corporate purposes.

For the three months ended June, the company’s revenue from operations rose 6% to Rs 245 crore, while net profit was up 31% to Rs 26.9 crore in the same period.

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