IRM Energy - A new kid on the (listed CGD) block

IRM Energy IPO came few weeks back and listed with 5% discount though it was oversubscribed 27x.
Currently it is available at 8% discount to IPO price.

Not trying to repeat financials/operational details as ton for material is available in public domain as part of IPO analysis.

HDFCsec also initiated a coverage with 25% upside potential.

Key strengths:
This is only pure private sector play other in Adani total in CGD and comes from house of Cadila Pharma. It also has joint venture in Bio-gas and CNG cylinders. Should grow atleast 3x in next 5-7 years.

Standard CGD company risks.

My question to boarders is that everything looks so promising. Anything specific why market is ignoring and giving it valuations even lower than PSUs.

Disc: Invested around CMP after IPO and forms 1% of my PF.


May be because of promoter. Just google cadila pharma promoter and his way of handling business.

Cadila pharma itself has lagged in terms of growth.

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But IRM Energy has professional management and board is chaired by a retired IAS officer.
Promoter is on board as non-exec member.

There is nothing to complain about execution so far.

Also IRM energy seems to be vision of the chairman. He has excellent credentials.

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If promoter credentials not worthy, how the IPO was success? Was it not factored?


Another noteworthy thing is that promoters and other investors didn’t sell during IPO. It was all new shares issued as company needs funds to start operations in new geography TN(recently won). Unlike most other IPOs where existing investors are exiting to encash in bull market.

Also noticed that two MF increased their holding in Nov, DSP and ITI and Quant Small cap invested for first time in Nov.


Highly noteworthy point…no offloading happened…

Cadila Pharma Promoter - in pharma circle the company do not have very good credential to talk about. To attract talent is a steep task to expect from that company. Cadila Pharma-Torrent Pharma-Zydus Cadila-Intas : all were at same levels (Infact Cadila pharma was ahead) in early 2000. Zydus Cadila and Cadila Healthcare promoters were partners if I am not wrong (hence Zydus Cadila & Cadila Pharma). Then the rest is history.
My only point was - as your message implied Cadila Pharma promoter means something positive, in my view and anyone in pharma industry will say its a negative, to say the least.

There may be some truth to what you are saying. Glassdoor rating for Cadila Pharma is low 3.1 but same for IRM Energy is 4 (caveat only 9 reviews) and 3.4 for Adani Gas.

So work culture at IRM energy seems to be positive and CEO is a professional coming from engineering background having worked at Kalptaru Power and KEC.

This is positive for IRM energy. Government is serious about blending 5% bio gas. IRM through its associate “FarmGas” can have reasonably large play in this area.

Any idea what triggered sharp up-move yesterday. Anything specific to do with IRM or general smallcap mania.

I believe it is due to budget news. Lot of boost given to budget for clean energy.

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I think it was also reaction to fall in gilts yields due to fiscal consolidation target of budget. Interest rate fall to follow and being utility it still has decent amount of debt after repaying 1/3rd from IPO proceeds.

Came across this article on IRM. Clearly calls out that IRM is professionally managed under an chairmanship of an ex-IAS. Chairman has lot of credibility with government. He also has a commitment from promoter about non-interference.

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With government aligned, sector and private players like IRM can go places

Disc: Doubled my holding to 2% during correction to 510.

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Decent results


We should look at EBIDTA as there is large deferred tax item this Q. On EBIDTA(417 M) basis they have shown growth Y-o-Y(367M last year) as well as Q-o-Q(399 M last Q). Revenue is a function of gas prices so we should look at gas volumes.

HDFC sec raises target to Rs 665 based on Q3 results

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Talks favorably about strong business model and financial resilience

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IRM Investors-Presentation-Q3FY24.pdf (796.5 KB)

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Thanks. Very interesting set of information. New GA of Trichi and Nammakal is just 1% of volume still. It should become larger than 50% over time. So we are looking at doubling of volumes even if zero growth from other GA.

Another interesting fact I noticed that Mahanagar gas paid Rs 562 crore for Unison gas which has just 1.1 million metric standard. IRM is 5x of Unison currently.

Still seems to be one of undervalued stocks with virtually no downside and upside of 2x atleast.

Not sure if market is missing something or my/HDFC analysis is incorrect.

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