Bengaluru-based TruAlt Bioenergy Limited files DRHP for IPO
Bengaluru-based TruAlt Bioenergy Limited files DRHP for IPO
Bengaluru-based TruAlt Bioenergy Limited, one of India's leading biofuel producers, and one of the first producers of CBG under the Sustainable Alternative Towards Affordable Transportation ("SATAT") scheme has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise capital through an Initial Public Offering (IPO).
The IPO, with a face value of ₹10 each, is a mix of fresh issuance of Rs 750 crore and an offer for sale of up to 36 lakhs equity shares by promoters group selling shareholders. The offer for sale consists of up to 18 lakh equity shares by Dhraksayani Sangamesh Nirani, and up to 18 lakh equity shares by Sangamesh Rudrappa Nirani.
The company, in consultation with the book-running lead managers, may consider a private placement, rights issue, preferential offer or any other method of specified securities, for an aggregate amount not exceeding Rs 150 crores as Pre-IPO placement shall not exceed 20% of the size of the fresh issue. If such placement is completed, the fresh issue size will be reduced.
The offer is being made through the book-building process, wherein not less than 75% of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not more than 15% of the offer shall be available for allocation to non-institutional bidders, and not more than 10% of the offer shall be available for allocation to retail individual bidders.
The proceeds from its fresh issuance to the extent of Rs 172.68 crore will be utilized for funding capital expenditure towards setting- up multi-feed stock operations to pave- way for utilizing grains as an additional raw material in ethanol plant at TBL Unit 4 of 300 KLPD capacity; Rs 425 crore for funding working capital requirements; and for general corporate purposes.
TruAlt Bioenergy was incorporated in March 2021 led by Vijaykumar Murugesh Nirani. As of March 31, 2024, the company is recognized as India’s largest ethanol producer by installed capacity, with a daily production capacity of 1,400 kilolitres (KLPD). A report by CRISIL indicates that TruAlt had a 3.7% market share in ethanol production capacity for the fiscal year 2024.
Based in Bengaluru, TruAlt Bioenergy focuses on ethanol production, with current operations yielding 1,400 KLPD. The company plans to boost its production capacity by an additional 600 KLPD across three locations, aiming for a total of 2,000 KLPD by October 2024. As of March 31, 2024, their Compressed Biogas (CBG) unit has an annual installed capacity of 3.4 million kg. Additionally, the company is planning further expansion by setting up two greenfield ethanol units, adding another 700 KLPD capacity. Through its subsidiary, Leafiniti, TruAlt operates a CBG plant with a capacity of 10.20 tonnes per day (TPD) as of March 31, 2024, also producing solid and liquid fermented organic manure (FOM). To enhance its CBG capabilities, TruAlt has entered a non-binding agreement with Gas Authority of India Limited (GAIL) through Leafiniti to establish nine more CBG plants, subject to final agreements with a strategic partner.
Going ahead, TruAlt is diversifying into new areas such as second-generation (2G) ethanol, utilizing surplus bagasse—a byproduct of sugar production—as a raw material. The company plans to use 800,000 MT of bagasse from its Promoter Group companies to produce approximately 6 crore litres of 2G ethanol annually. A Memorandum of Understanding (MoU) with Praj Industries Limited has been signed to advance technology in various biofuels. TruAlt also aims to produce Sustainable Aviation Fuel (SAF) using ethanol and has entered into an MoU with a US-based sustainable fuel technology firm to produce 10 crore litres of SAF annually, positioning itself as the world’s largest SAF producer from ethanol. The company is also exploring the production of Mevalolactone (MVL) and related biochemicals during ethanol manufacturing, having partnered with Visolis Inc. to assess the feasibility of producing MVL in dual-purpose fermenters. TruAlt is in the process of establishing its first dispensing station in Mudhol, Karnataka, which will offer motor spirit, high-speed diesel, E85 and E93 blended fuel, bio-CNG, EV charging points, EV battery swapping, and a non-fuel retail division for fast-moving consumer goods and automotive products.
TruAlt's business performance is heavily influenced by the price and availability of raw materials like sugar syrup and molasses. To reduce reliance on these seasonal resources, the company plans to shift its focus towards producing grain-based ethanol. This strategic move will help control material costs, optimize revenue, and maintain consistent ethanol production.
In Fiscal 2023 and 2024, TruAlt generated revenues of ₹756.85 crore and ₹1,214.31 crore from its top 10 customers, accounting for 99.24% and 99.26% of its total revenue, respectively, highlighting its dependence on key clients.
TruAlt began operations in October 2022 after acquiring three distillery units in Karnataka. It aims to add 600 KLPD of ethanol capacity by October 2024, as part of the overall target of 2,000 KLPD. By March 31, 2024, TruAlt had invested ₹14,278.41 lakhs in capital expenditures for capacity expansion.
TruAlt Bioenergy's consolidated revenue from operations stood at ₹1,223.40 crore in fiscal 2024 and Profit after tax stood at ₹31.81 crore in fiscal 2024.
With the Indian Government’s increased support for alternative energy sources, India’s biofuel industry is growing at a tremendous pace and exploring forms of renewable bio-energy sources such as sustainable aviation fuel, compressed biogas, 2G ethanol, and green hydrogen along with promoting the manufacturing and consumption of fermented organic manure (“FOM”). The current biofuel market in India is mainly divided into ethanol, CBG, and biodiesel currently, of which ethanol forms a major chunk. Ethanol demand in India is expected to grow at a CAGR of 17.7% till Fiscal 2026. Indian SAF market is in a very nascent stage and is expected to catch up by 2025.
DAM Capital Advisors Limited and SBI Capital Markets Limited are the book-running lead managers and Bigshare Services Private Limited is the registrar of the offer. The equity shares are proposed to be listed on BSE and NSE.
DRHP Link: https://www.sbicaps.com/wp-
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