Upcoming IPO: Ellenbarrie Industrial Gases files DRHP for IPO with SEBI

Upcoming IPO: Ellenbarrie Industrial Gases Ltd has filed its draft red herring prospectus (DRHP) with the capital market regulator, Securities and Exchange Board of India (SEBI), for an initial public offering (IPO).

Kolkata-based Ellenbarrie Industrial Gases is the largest 100% Indian-owned industrial gases firm in India in terms of installed manufacturing capacity as of March 31, 2024, sales, and profitability in fiscal 2024, as per F&S Report.

The company produces and distributes industrial gases to a variety of end-user industries, such as oxygen, carbon dioxide, acetylene, nitrogen, helium, hydrogen, argon, and nitrous oxide. It also provides dry ice, synthetic air, fire-fighting gases, medical oxygen, liquid petroleum gas, welding mixture, and specialty gases.

As of March 31, 2024, the company's installed manufacturing capacity in West Bengal, Andhra Pradesh, and Telangana combined ranked it as the largest producer of industrial gases in both East and South India. The corporation, as of March 31, 2024, operated eight sites throughout East, South, and Central India, with four of those locations being in West Bengal, two in Andhra Pradesh, one in Telangana, and one in Chhattisgarh.

Issue Details

The initial public offering (IPO) has a face value of ₹2 per equity share and includes a combination of a fresh issue of up to ₹400 crore and the offer of sale of up to 1.44 crore equity shares by Promoter Selling Shareholders.

The offer for sale includes the sale of a maximum of 72 lakh equity shares each by Padam Kumar Agarwala and Varun Agarwal. The company, in coordination with the book-running lead manager, may contemplate raising up to ₹80 crore through a pre-IPO placement. If such a placement is finalised, the size of the fresh issue will be decreased.

The book-running lead managers to the issue are Motilal Oswal Investment Advisors Ltd, IIFL Securities Limited, and JM Financial Ltd, while KFin Technologies Ltd serves as the registrar to the offer.

The company plans to use the net proceeds from the fresh issue amounting to Rs. 176.8 crore for repaying or prepaying certain outstanding borrowings availed by the company, either in full or in part. Additionally, ₹130 crore will be allocated for establishing an air separation unit at our Uluberia-II plant, which will have a capacity of 220 TPD, and for general corporate purposes.

Marquee Clients

With 1,836 clients in fiscal 2024, the firm has one of the largest customer bases of any gas company in India. This suggests a widely diverse customer base with no risk of concentration.

Prominent companies like Vizag Steel, Dr. Reddy's, HSL, Jupiter Wagon Ltd, All India Institute of Medical Sciences (AIIMS), Air India Engineering Services Limited, Hindustan Shipyard Limited, Indian Armed Forces, West Bengal Power Development Corporation Limited, etc. are among Ellenbarrie's clientele.

Financials

In fiscal 2024, Ellenbarrie saw a 31.38% increase in its revenue from operations, reaching ₹269.4 crore compared to ₹205.1 crore in fiscal 2023. This rise was mainly attributed to higher sales of manufactured products and increased revenue from construction contracts. The company's profit for the year also surged by 60.93% to ₹45.2 crore in fiscal 2024, up from ₹28.1 crore in fiscal 2023.

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