New Delhi: Industrial gases major Ellenbarrie Industrial Gases’ IPO has opened today, with 1.51 crores on offer in the price band Rs.380-400 per share. The lot size is 37 shares of Rs.2 face value and in multiples of that thereafter. 50% of the shares have been allocated for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs) and the remaining 35% for retail investors. The IPO includes a fresh issue of Rs.400 cr shares along with an offer for sale (OFS) component of Rs.452.53 crore.
The company aims to use the IPO proceeds to repay Rs.210 cr outstanding debt, Rs.104.5 cr to set up an air separation unit at its Uluberia-II facility in West Bengal and the rest for general corporate purposes.
Ahead of the IPO, Ellenbarrie Industrial Gases Limited (EGIL) raised Rs.256 cr from institutional investors including HDFC MF, Axis MF, Tata MF, ICICI Bank MF, Nippon India MF among others.
Founded in 1973, Ellanbarrie produces industrial and medical gases, including nitrogen, oxygen, argon, CO2, and other specialty gases at its eight plants. It supplies these gases to steel, pharma, healthcare and chemical clients, accounting for 84% of its revenue. About 92% of its revenues come from repeat customers through bulk contracts. It has one of India’s largest fleets of cryogenic tankers, with 1,445 dealers, 35,000 cylinders, and dedicated onsite pipeline plants. The company aims to boost its capacity from 1,370 TPD to 2,100 TPD by next year.
Currently, the company has just under 3% market share, as against Inox Wind’s 22% and Linde’s 31%. The company aims to increase market share with this capital infusion. Despite this, analysts and broking houses are recommending a ‘subscribe’ rating, as the niche offers a relatively stable business outlook and a strong scope for capital appreciation.
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