TruAlt Bioenergy IPO GMP: Will this IPO be right for you?
The IPO market has heated up again in India, and this time, all eyes are on a new issue – the TruAlt Bioenergy IPO. This company is a major player in ethanol production and is now turning to the public market for its growth. As this IPO begins, a question is arising in investors’ minds: what is the TruAlt Bioenergy IPO GMP saying, and what do analysts think?
In this article, we’ll discuss key IPO details, GMP trends, company strengths, and risks to help you decide whether this IPO will be profitable for you.
What is the TruAlt Bioenergy IPO GMP signaling?
The TruAlt Bioenergy IPO, which opened on September 25th, has generated significant investor interest. Even before the IPO opened, the company’s unlisted shares were selling rapidly in the gray market. Reports indicate that the TruAlt Bioenergy IPO GMP was trading around 16%, significantly higher than the previous GMP of 11-12%. According to IPO Watch, shares were seen selling at a 12% premium over the IPO price.
This clearly indicates positive market sentiment regarding the issue, and short-term listing gains are expected.
IPO Details and Bidding Process
This time the IPO size has been kept quite large. The company is bringing a fresh issue of ₹750 crore and has also included an offer for sale of ₹89 crore. The IPO price band has been fixed at ₹472–₹496 per share and bidding will be open from September 25 to September 29.
The minimum lot size for retail investors is 30 shares. If you apply at the upper price band, you will have to invest approximately ₹14,880. This entry point is manageable for investors who want to gain new exposure through an IPO. Share allotment is expected to be finalized on September 30, and listing on the stock exchanges will take place on October 3.
The lead managers of this issue are DAM Capital Advisors and SBI Capital Markets. As per the allocation pattern, 50% of the quota is reserved for QIBs, 15% for NIIs, and 35% for retail investors.
TruAlt Bioenergy IPO Funds to be used between GMP
The company is based in Bengaluru and is raising funds through the IPO to expand its ethanol production capacity. Currently, the company has an installed ethanol capacity of 2,000 kilolitres per day. A major portion of the IPO proceeds, approximately ₹150 crore, will be used to set up multi-feed stock operations.
In addition, ₹425 crore has been allocated for working capital, and the remaining funds will be used for general corporate purposes. A day before the IPO opened, the company had raised ₹252 crore from anchor investors. Major names such as Tata Mutual Fund, HDFC MF, Bandhan MF, SBI General Insurance, and Citigroup Global Markets Mauritius were included in the anchor book.
Analysts say: Should this IPO be subscribed to?
According to analysts, the IPO valuation takes the company’s market cap between ₹4,200–4,300 crore at the upper price band. Harshal Dasani, Business Head, INVAsset PMS, says that the company’s strength lies in its strong ethanol capacity and the support of the government’s ethanol-blending policy. Furthermore, the company’s profitability and return on equity also show an improving trend.
But there are risks – such as dependence on government-regulated pricing, sensitivity to the availability of cans and molasses, and working capital-intensive operations. Despite improvement in debt levels, leverage is quite high.
Valuation-wise, the IPO is priced at 23–24x FY25 earnings and 2.2x sales. This is fair compared to specialty processors, but appears slightly expensive compared to commodity sugar peers.
What are the benefits for long-term investors?
TruAlt Bioenergy’s IPO size has been kept quite large. The company is bringing in a fresh issue of ₹750 crore through this issue, along with an offer for sale of ₹89 crore. The IPO price band has been fixed at ₹472 to ₹496 per share and bidding will be open from September 25 to September 29. All of this creates a strong tailwind for TruAlt Bioenergy.
The company’s financials also show growth in both revenue and profit, although debt levels remain high. The promoter stake will decrease from 88.2% to 70.5% after the IPO, which is a positive sign for retail and institutional investors.
Now talking about the long-term perspective, experts say that if the company is able to maintain its profit margins consistently above 16% and gradually reduce its debt level, then this IPO has the potential to become a solid wealth creator in the future.
Conclusion: Is the TruAlt Bioenergy IPO a golden opportunity?
The TruAlt Bioenergy IPO offers a unique opportunity for investors who believe in the growth potential of the ethanol and biofuels sector. The TruAlt Bioenergy IPO GMP currently shows positive sentiment, and listing gains appear possible in the short term.
But, as is always the case with each IPO, there are risks here as well. Any big shifts in government policies or disturbances in raw material supply like cane and molasses could directly affect a company’s performance. Thus, if you have a high-risk appetite and are willing to place bets on long-term expansion, this IPO might be a good choice for you.
Disclaimer:
The views and recommendations above are those of individual analysts or brokerage companies, not US News Weeks. We advise investors to check with certified experts before making any investment decisions.
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