Ellenbarrie Industrial Gases Limited

 Ellenbarrie Industrial Gases Limited files DRHP with Sebi to raise funds via IPO

Kolkata-based Ellenbarrie Industrial Gases has filed its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) through an initial public offering (IPO).

The IPO with a face value of Rs 2 per equity share, is a mix of fresh issue of up to Rs 400 Cr and an offer of sale up to 1.44 cr equity shares by Promoter Selling Shareholders.

 

The offer for sale consists of sale of upto 72 lakh equity shares each by Padam Kumar Agarwala and Varun Agarwal. The company, in consultation with the book-running lead manager, may consider raising up to Rs 80 crore in a pre-IPO placement. If such placement is completed, the fresh issue size will be reduced.

The offer is being made through the book-building process, wherein not more than 50% of the net offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the net offer shall be available for allocation to non-institutional bidders, and not less than 35% of the net offer shall be available for allocation to retail individual portion.

The company proposes to utilize the Net Proceeds from the Fresh Issue to the extent of Rs. 176.8 cr will be used for the repayment/prepayment, in full or in part, of certain outstanding borrowings availed by the company; Rs. 130 cr will be used to setting up of an air separation unit at our Uluberia-II plant with a capacity of 220 TPD and general corporate purposes.

Ellenbarrie Industrial Gases is India’s largest 100% Indian-owned industrial gases company in terms of installed manufacturing capacity as of March 31, 2024, revenues and profitability in Fiscal 2024. (Source: F&S Report). With a rich legacy of 50 years, Ellenbarrie is one of the oldest operating industrial gases companies in India.

The company manufacture and supply industrial gases including oxygen, carbon dioxide, acetylene, nitrogen, helium, hydrogen, argon and nitrous oxide, as well as dry ice, synthetic air, fire-fighting gases, medical oxygen, liquid petroleum gas, welding mixture and speciality gases catering to a wide range of end-use industries. In addition, it also caters to the specific requirements of industries such as steel; pharmaceuticals and chemicals; healthcare; engineering and infrastructure; railways, aviation, aerospace and space; petrochemicals; food and beverages; energy; electronics; manufacturing; defence, through use cases.

It is one of the largest manufacturers of industrial gases in East India and South India, and the market leader in the states of West Bengal, Andhra Pradesh and Telangana, each in terms of installed manufacturing capacity, as of March 31, 2024. The company operate eight facilities across East, South and Central India, of which four facilities are located in West Bengal, two in Andhra Pradesh, one in Telangana and one in Chhattisgarh, as on 31st March 2024.

Ellenbarrie have established relationships with several Indian customers across industries through over fifty years of business operations. In Fiscal 2024, the company sold their products to 1,836 customers, which represented one of the highest number of customers of any gas company in India, indicating a highly diversified customer base with limited concentration risk.

Ellenbarrie’s client base includes marquee names such as Vizag Steel, Dr. Reddy’s, HSL, Jupiter Wagon Ltd, All India Institute of Medical Sciences (AIIMS), Air India Engineering Services Limited, Hindustan Shipyard Limited, Indian Armed Forces, West Bengal Power Development Corporation Limited etc.

Ellenbarrie’s revenue from operations increased by 31.38% to ₹269.4 cr in Fiscal 2024 from ₹ 205.1 cr in Fiscal 2023, primarily due to increases in the sale of manufactured products and revenue from construction contracts. Company’s profit for the year increased by 60.93% to ₹45.2 cr in Fiscal 2024 from ₹28.1 cr in Fiscal 2023.

The size of the industrial gases market in India was estimated at US$ 1.22 billion in 2023, and is expected to reach US$ 1.75 billion by 2028, growing at a CAGR of 7.5% between 2023 and 2028. (Source: F&S Report). The large domestic market is driven by Government initiatives such as 'Make in India' and the increasing call for import substitution, as well as demand from sectors such as steel, pharmaceuticals, manufacturing, defence, chemicals, healthcare, energy, pharma and electronics, and their growth prospects. (Source: F&S Report)

Motilal Oswal Investment Advisors Limited, IIFL Securities Limited, JM Financial Limited are the book-running lead managers to the issue and KFin Technologies Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.