City gas distribution company, IRM Energy, saw its Initial Public Offering (IPO) oversubscribed by a factor of 27.05 during the subscription period from Tuesday to Thursday. The period saw bids for 20,62,70,910 shares against the offered 76,24,800 shares. The IPO included a fresh issue of up to 1.08 crore equity shares.
Non-institutional investors demonstrated the highest interest in the IPO with a subscription rate of 48.34 times. They were followed by Qualified Institutional Buyers (QIBs) and Retail Individual Investors (RIIs) at 44.73 and 9.29 times respectively.
Today, IRM Energy's shares are trading in the grey market at a premium of Rs 49 above their upper issue price of Rs 505 per share, indicating a Grey Market Premium (GMP). This GMP suggests a projected listing gain of approximately 9.7% from the public issue.
The company has secured Rs 160 crore from anchor investors and plans to allocate Rs 307.26 crore for capital expenditure requirements. This will specifically go towards expanding its city gas distribution network in Namakkal and Tiruchirappalli, Tamil Nadu. Approximately Rs 135 crore is slated for debt repayment, with the remaining funds allocated for general corporate purposes.
According to InvestingPro Tips, IRM Energy holds more cash than debt on its balance sheet and has impressive gross profit margins, which are reflected in the company's robust gross profit of 72.63M USD, representing a margin of 67.96% as per InvestingPro Data. This solid financial footing might have contributed to the high interest in the company's IPO.
The company is expected to allot shares on either Monday or Wednesday, marking the next significant step in this IPO process.
InvestingPro's real-time metrics reveal that IRM Energy's market cap stands at 1020M USD and the company's P/E ratio is 95.96, suggesting a high earnings multiple, a point highlighted by InvestingPro Tips. Despite the company's strong financial position, the stock has been in oversold territory recently, with a significant fall in price over the last three months. This is indicated by the company's 3 Month Price Total Return of -39.17% according to InvestingPro Data.
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