TruAlt Bioenergy IPO: Issue Subscribed 19% So Far On Day 1, GMP Hints Strong Listing Gains

TruAlt Bioenergy's initial public offering (IPO) booked 19 per cent so far on the first day of bidding, September 25. The public issue, which is a combination of a fresh issue and an offer for sale (OFS) component, will remain open until September 29.

As of 4:30 PM, the qualified institutional buyer (QIB) quota saw nil subscriptions, the non-institutional investor (NII) category saw 23 per cent subscriptions, and the retail investor portion was booked at 29 per cent.

TruAlt Bioenergy IPO Details

TruAlt Bioenergy IPO Issue Size

TruAlt Bioenergy IPO is a book-built issue worth Rs 839.28 crore, which includes a fresh issue of 15.12 million shares worth Rs 750 crore and an offer for sale of 1.8 million shares worth Rs 89.28 crore.

TruAlt Bioenergy IPO Price Band, Lot Size, Minimum Investment

Shares are being offered in a price range of Rs 472 to Rs 496 per share in a lot size of 30 shares. Retail investors are, therefore, required to invest a minimum amount of Rs 14,880 to acquire one lot, based on the upper band of the issue price.

TruAlt Bioenergy IPO Allotment Date

The basis of allotment for TruAlt Bioenergy's IPO is likely to be finalised on September 30. Refunds for non-allottees and credit of shares to demat accounts are expected on October 1.

TruAlt Bioenergy IPO Listing Date

Shares of TruAlt Bioenergy IPO is scheduled to list on both the exchanges – National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) – on October 3.

TruAlt Bioenergy IPO BRLMs, Registrar

Dam Capital Advisors and SBI Capital Markets are the book-running lead managers for TruAlt Bioenergy IPO, and Bigshare Services is the registrar to the issue.

TruAlt Bioenergy IPO GMP Today

According to multiple websites that track grey market premiums (GMPs) of unlisted shares of IPO-bound companies, the TruAlt Bioenergy IPO is trading with a GMP of Rs 80 per share over the issue price. Ahead of the opening of the issue, it quoted a GMP of Rs 60, as on September 23. Over the last two days, TruAlt Bioenergy IPO GMP has inflated by 33.33 per cent.

Given the current GMP and the upper band of the issue price of Rs 496 apiece, TruAlt Bioenergy IPO shares are expected to list at Rs 576 per share, a potential listing gain of 16.13 per cent.

TruAlt Bioenergy Financial Performance

TruAlt Bioenergy reported a revenue of Rs 1,907.72 crore for the previous fiscal year (FY25), up from Rs 1,223.40 crore in FY24 and Rs 762.38 crore in FY23.

The company's net profit for FY25 came in at Rs 146.63 crore, up from Rs 31.80 crore in FY24 and Rs 35.46 crore in FY23.

Its diluted earnings per share (EPS) stood at Rs 20.94 in FY25, up from Rs 4.25 in FY24 and Rs 7.10 in FY23.

TruAlt Bioenergy Strengths and Risks

Strengths:

According to TruAlt Bioenergy's red herring prospectus, the company is a "leading ethanol producer in India with a growing scale of operations." The government's focus on blending ethanol with petrol, the company said, gives it a clear growth runway.

TruAlt said it has access to steady raw material through long-term supply deals with promoter group entities. "These contracts ensure we have a reliable supply of sugarcane and related by-products," the company said.

The company also has "a diversified revenue stream from ethanol, power, and by-products," which reduces dependence on a single source.

The company also plans to expand capacity and capitalise on "rising ethanol demand driven by India's energy transition."

Risks:

TruAlt Bioenergy's operations are "primarily dependent on the sale of ethanol," the company said in its RHP, and any fall in prices or demand could hurt growth. It also warned that changes in government policies may have a direct impact on revenues. 

TruAlt, which only started ethanol production in September 2022, acknowledged its limited operating history. "We may not be able to derive the anticipated benefits from our acquisitions," it said.

The company's plants are all located in Karnataka's Bagalkot district, making it vulnerable to disruptions at a single site. TruAlt also noted its heavy reliance on a few large customers, mainly oil marketing companies. Losing one of them "may adversely affect our business," it said. 

The company further highlighted dependence on supply contracts with promoter group entities for raw materials, risks of under-utilisation of production capacity, and past regulatory matters involving group companies. 

It also disclosed that promoters had pledged some of their shares for loans, adding that any enforcement of such pledges could dilute promoter holdings.