Ellenbarrie Industrial Gases IPO: A New Opportunity in the Industrial Sector
Ellenbarrie Industrial Gases Limited has recently received approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO). This marks a significant milestone for the company, which submitted its draft red herring prospectus (DRHP) to the market regulator on September 18, 2024. As the company prepares to enter the public market, investors are keenly observing the developments surrounding this IPO.
Company Overview
Ellenbarrie Industrial Gases Limited specializes in the production and distribution of a wide range of industrial gases. The company’s portfolio includes essential gases such as oxygen, carbon dioxide, acetylene, nitrogen, helium, hydrogen, argon, and nitrous oxide. Additionally, Ellenbarrie produces dry ice, synthetic air, fire-fighting gases, medical oxygen, liquid petroleum gas, welding mixtures, and specialty gases. This diverse product range positions the company as a key player in various end-user industries, including healthcare, manufacturing, and energy.
The company boasts an impressive client list, which includes prominent names such as Vizag Steel, Dr. Reddy’s Laboratories, Hindustan Shipyard Limited, and the All India Institute of Medical Sciences (AIIMS). Such partnerships highlight Ellenbarrie’s significant role in supporting critical sectors across the nation.
IPO Details
Ellenbarrie Industrial Gases’ IPO will feature a fresh issue of shares worth up to ₹400 crore, with each share having a face value of ₹2. In addition to the fresh issue, the IPO includes an offer-for-sale (OFS) component, which consists of up to 1.44 crore equity shares. The OFS will see the promoters, Padam Kumar Agarwala and Varun Agarwal, selling 72 lakh equity shares each.
The company is also considering raising an additional ₹80 crore through a pre-IPO placement, which could further bolster its financial standing ahead of the public offering.
Utilization of Funds
The funds raised from the fresh issue will be strategically allocated to enhance the company’s operational capabilities and financial health. Specifically, Ellenbarrie plans to use ₹176.8 crore to repay or prepay certain outstanding borrowings, thereby reducing its debt burden. Furthermore, the company aims to invest ₹130 crore in establishing an air separation unit at its Uluberia-II plant, which will have a capacity of 220 tons per day (TPD). This investment is expected to enhance production efficiency and meet the growing demand for industrial gases.
The remaining funds will be allocated for general corporate purposes, ensuring that the company maintains flexibility in its operations and strategic initiatives.
Management and Advisory Team
The IPO is being managed by a team of experienced financial advisors, including Motilal Oswal Investment Advisors Ltd, IIFL Securities Limited, and JM Financial Ltd, who are serving as the book-running lead managers for the public issue. KFin Technologies Ltd has been appointed as the registrar to the offer, ensuring a smooth process for potential investors.
Conclusion
The upcoming IPO of Ellenbarrie Industrial Gases Limited presents an intriguing opportunity for investors looking to tap into the industrial gases sector. With a robust product portfolio, a diverse client base, and strategic plans for growth, the company is well-positioned to capitalize on the increasing demand for industrial gases in various industries. As the IPO date approaches, potential investors are encouraged to conduct thorough research and consult with financial experts to make informed decisions.
In a rapidly evolving market, Ellenbarrie Industrial Gases’ entry into the public domain could signify not just a new chapter for the company but also a promising investment opportunity for those looking to diversify their portfolios in the industrial sector.