IRM Energy Disappoints on BSE Despite High Subscription Rate
Disappointing Debut on Bombay Stock Exchange
IRM Energy, supported by Cadila Pharmaceuticals, had a lackluster debut on the Bombay Stock Exchange (BSE) on Thursday. The company listed at a 7% discount from its issue price of Rs 505, opening at Rs 477.25 per share. This disappointing start came despite an oversubscription rate of 27.05 times during the October 18-20 subscription period. It’s worth noting that the initial public offering (IPO) primarily attracted institutional investors.
Market Capitalization and Offer for Sale
The market capitalization of IRM Energy currently stands at Rs 1,966 crore. Unlike other recent stocks, such as Plaza Wires, Updater Services, JSW Infra, Yatra Online, and Signature Global, which experienced varying listing gains, IRM Energy did not have an offer for sale portion in its IPO.
Subscription Details and Financial Performance
The IPO featured a fresh issue of up to 10.8 million equity shares within the price range of Rs 480-505 per share. It received bids for over 200 million shares against an offer of around 7.6 million shares. The subscription rate varied among different investor categories, with non-institutional investors subscribing 48.34 times, QIBs 44.73 times, and retail individual investors 9.29 times.
In the financial year 2023, IRM Energy witnessed a doubling of its revenues to Rs 1,039 crore. The net profit also increased by 35% to Rs 26.9 crore. The company raised over Rs 160 crore from anchor investors, and the IPO proceeds of Rs 307.26 crore will be utilized for capital expenditure to develop city gas networks in Namakkal and Tiruchirappalli in Tamil Nadu. Additionally, it will be used to repay a debt of Rs 135 crore and cover general corporate expenses.
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