IRM Energy, an energy company with operations in Gujarat, Punjab, and Tamil Nadu, debuted its shares on the NSE at Rs 477 ($1 = Rs 83.2), marking a 5.5% discount from its issue price of Rs 505 on Thursday. The less-than-expected debut is attributed to current market conditions by Shivani Nyati of Swastika Investmart.
Despite the initial downturn, the company's Rs 545-crore (Rs 1 crore = $120,127) IPO was oversubscribed by 27 times. The funds raised through the IPO will be channelled towards capital expenditure and debt repayment. Specifically, IRM Energy plans to allocate Rs 307.26 crore for capital expenditure in Namakkal and Tiruchirappalli in Tamil Nadu, while Rs 135 crore is set aside for debt repayment.
Analysts remain optimistic about IRM Energy's future. This positive outlook is based on several factors including an impressive revenue growth rate of 88% CAGR and a volume growth rate of 63%. The company's diversified customer base, robust distribution network, strategic GA acquisitions, and an ambitious volume growth plan were also highlighted as key strengths. The company aims to increase its volume from 0.54 MMSCMD in FY23 to a projected 1.51 MMSCMD in FY27E.
Furthermore, the company's strong parentage, experienced leadership team, and emphasis on technology adoption were noted as contributing factors to its potential for sustained growth.
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