TruAlt Bioenergy IPO Day 2: Check GMP, subscription status, review: Should you apply?

TruAlt Bioenergy IPO Day 2: The initial public offering (IPO) of TruAlt Bioenergy, which opened for bidding on Thursday, September 26, entered its second day of subscription today. The issue is available for bidding till Monday, September 29.

TruAlt Bioenergy's ₹839.28 crore IPO comprises a fresh issue of shares worth ₹750 crore and an offer-for-sale of ₹89.28 crore by the promoters.

TruAlt Bioenergy IPO price band is fixed at ₹472-496 per share. Investors can apply for the TruAlt Bioenergy IPO in lots of 30 shares, needing a minimum investment of ₹14,880 by a retail investor.

Funds raised from the fresh share sale will be used for setting up multi-feed stock operations, payment of debt and general corporate purposes.

TruAlt Bioenergy IPO allotment date is set as September 30, while the tentative listing date could be October 3. Ahead of the share sale, it raised ₹252 crore from anchor investors.

TruAlt Bioenergy IPO Subscription Status

At the end of the second day, TruAlt Bioenergy IPO subscription status was at 81%. The qualified institutional buyers (QIBs) portion received 87% subscription, while the quota for retail investors was subscribed 79%. The portion for non-institutional investors (NIIs) attracted 80% subscription.

TruAlt Bioenergy IPO GMP

The grey market premium has held steady. As per market sources, TruAlt Bioenergy IPO GMP today is ₹80. This means shares of TruAlt Bioenergy IPO are trading ₹80 above the upper end of the price band.

At the prevailing GMP, TruAlt Bioenergy IPO listing price could be ₹576, a premium of 16.13% compared to the issue price of ₹496.

TruAlt Bioenergy IPO Review

According to Reliance Securities, while the bioenergy sector in India offers promising growth prospects, it is essential for companies like TruAlt Bioenergy Ltd to navigate the associated risks through strategic planning, technological innovation, and proactive policy engagement.

"With its diversified product portfolio, strategic partnerships, and robust financial performance, the company is well-positioned to capitalise on India's growing demand for sustainable energy solutions By addressing these challenges, the company can capitalise on the expanding market opportunities and contribute to India's sustainable energy future. Owing to such developments, we recommend to subscribe," said the brokerage.

Canara Bank Securities also has a 'Subscribe' rating on the IPO.

Despite a stretched working capital cycle and dependency on promoter group for raw materials and reliance on OMCs for revenue, the company maintains robust margins, positive operating cash flow, and strong longterm growth prospects through diversification into new verticals such as advanced fuel dispensing (motor spirit, high-speed diesel, E85/E93 ethanol blends), bio-CNG, and EV charging stations, said the brokerage.

With a reasonable industry P/E of 23.6x and improving EBITDA margins, we recommend a “Subscribe” rating for long-term investors, it added.

About TruAlt Bioenergy

TruAlt Bioenergy is involved in the manufacturing of biofuels, with a focus on the ethanol industry. It is one of India's largest ethanol manufacturers by installed capacity of 2,000 kilo litres per day (KLPD).

The business operations of the company extend to ethanol production and the production of compressed biogas (CBG). However, 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, it plans to enter other verticals such as second-generation ethanol, sustainable aviation fuel, and Mevalonolactone.

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.