India's IRM Energy slides 11% in debut trade at over $200 mln valuation (updated)

Irm Energy

26/10/2023 06:36

(Adds details on IPO in paragraphs 4 and 6, analyst comment in
paragraph 5)
    By Rama  Venkat
       BENGALURU, Oct 26 (Reuters) - Shares of IRM Energy
 IRME.NS  fell as much as 10.9% in trading debut on Thursday,
valuing the Indian natural gas distributor at 18.48 billion
rupees ($222.03 million) in a weak market. 
    The stock fell to a low of 450 rupees in early trade after
opening at 477.25 rupees. Its initial public offer (IPO) price
was at 505 rupees.
    The benchmark Nifty 50  .NSEI  was down 1.3%, while the more
domestically-focused mid-cap  .NIFMDCP100  and small-cap
 .NIFSMCP100  stocks declined more than 2% each.  .BO  
    Investors bid for about 206.3 million IRM Energy shares by
the final day of subscription, 27.05 times more than the 7.6
million shares on offer, exchange data showed.
        "The IPO was well-received by investors and
oversubscribed. However, the current market condition could be a
reason behind a poor listing," said Shivani Nyati, head of
wealth at Swastika Investmart. 
  
        The company, with a diversified customer portfolio and
distribution network, is well-positioned to benefit from the
growing demand for natural gas in India, Nyati added. 
  
    The IPO of IRM Energy, a group company of Cadila
Pharmaceuticals, comprised of fresh issue of 10.8 million shares
worth 5.44 billion rupees, according to the prospectus.  
    The company plans to use about 3 billion rupees of proceeds
from the IPO to fund the development of the gas distribution
network in Namakkal and Tiruchirappalli in the southern state of
Tamil Nadu.     
    The Ahmedabad-based company builds, operates and expands the
gas distribution network for industrial, domestic and automobile
customers.
    HDFC Bank and BOB Capital Markets were book-running lead
managers for the IPO. 
    So far this year, 173 Indian companies have gone public,
raising $4.46 billion, compared with 115 companies that raised
$6.06 billion in the same period last year, according to LSEG
data.

($1 = 83.2325 Indian rupees)

 (Reporting by Rama Venkat in Bengaluru;Editing by Nivedita
Bhattacharjee and Eileen Soreng)
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