IRM Energy Limited, the city gas distribution (CGD) arm of the Ahmedabad-based Cadila Pharmaceuticals Limited has filed draft papers for the initial public offer (IPO).

The company had filed draft red herring prospectus (DRHP) with the markets regulator Securities and Exchange Board of India (SEBI) on December 14 for the public issue.

The company intends to raise funds via a complete fresh issue of upto 1.01 crore equity shares.

The promoters collectively hold 67.94 per cent, including Cadila Pharmaceuticals and IRM Trust which is headed by Cadila Pharmaceuticals promoter Rajiv I Modi.

As per the DHRP, the proceeds from the issue will be utilised to fund development of the City Gas Distribution network at Namakkal and Tiruchirapalli in Tamil Nadu during the fiscal 2024, 2025 and 2026. The company intends to utilise about ₹307.26 crore for the purpose, while ₹167.5 crore will be used for prepayment or repayment of all or a portion of certain outstandings, besides undisclosed amount to be used for general corporate purpose.

IRM Energy will consider pre-placement for upto 20 lakh equity shares. The shares of the company will be listed on the BSE and NSE.

The company’s revenues from operations stood at ₹504.12 crore for the six months ended September 2022 against ₹205.45 crore in the comparable period a year ago. Net profit was recorded at ₹39.25 crore for the period against ₹47.81 crore in the year-ago period. The total borrowings as of September 2022 stood at ₹287.8 crore.

As a CGD palyer, IRM Energy supplies piped natural gas (PNG) and compressed natural gas (CNG) in Gujarat, Punjab and Tamil Nadu. It serves 168 industrial, 202 commercial and 42,183 domestic customers as of September 2022.

The company has appointed HDFC Bank and BOB Capital Markets as the book-running lead managers to the issue.

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