TruAlt Bioenergy Ltd IPO

About TruAlt Energy Limited IPO

TruAlt Energy Limited IPO is an IPO of TBA. It consists of an offer for sale of 36,00,000 equity shares and a fresh issue aggregating up to ₹750 crores. The shares will be allotted on TBA. The credit of shares to the demat account will take place on TBA and the initiation of refunds will take place on TBA.

Objective of TruAlt Energy Limited IPO

• Funding capital expenditure towards setting up multi-feed stock operations to pave-way for utilizing grains as an additional raw material in ethanol plants at TBL Unit 4 of 300 KLPD capacity.
• Funding their working capital requirements.
• General corporate purposes.

Industry Outlook

The Ethanol market is growing steadily in India and is projected to grow further in the years to come. It is expected to grow at a CAGR of 17.7% till fiscal 2026. In fiscal 2023, India's ethanol contribution to the EBP Program stood at approximately 548 crore litres, a figure projected to rise substantially to 1,016 crore litres by fiscal 2026. In 2022-2023, the overall ethanol market, including ethanol for diverse uses, is estimated to be at 828 crore litres and is anticipated to expand significantly, reaching 1,350 crore litres by the year 2026. This upward trajectory underscores the nation's robust commitment to increasing ethanol utilisation, higher blending targets under the EBP Program, potential utilization of ethanol in blending of diesel, for flex fuel vehicles, cooking fuel and SAF, reinforcing sustainable energy practices, and fostering a greener future.

The Central Board of Indirect Taxes and Customs in July 2022 has exempted the excise duty on 12% ethanol blended petrol and 15% ethanol blended petrol in order to support the ethanol production in the country. The Government of India and certain State Governments have also included ethanol projects under their priority sector lending criteria, which has encouraged banks to sanction loans for ethanol projects to achieve priority sector lending thresholds.

Company Information

TruAlt Energy Limited Company currently operates three ethanol production distilleries on molasses and syrup-based feedstocks. Further, the company is in the process of converting their current mono feed (sugarcane juice /sugar syrup/molasses) unit to a dual feed unit. By March 2026, out of the 2,000 KLPD (kilo litres per day) capacity, they intend to convert 1,000 KLPD to dual-feed, capable of producing ethanol from grain-based feedstocks or grains unfit for human consumption.

In addition, they intend to further expand their ethanol production capabilities by setting up two greenfield units with an additional capacity of 700 KLPD comprising of two units of 500 KLPD and 200 KLPD each to an aggregate production capacity of 2,700 KLPD by fiscal 2027.

As part of their ethanol production, they also produce extra neutral alcohol (“ENA”), the primary raw material in the production of alcoholic beverages. Their product portfolio also includes dry ice and liquid carbon dioxide ("CO2"), by-products in the ethanol production process.

Risks of TruAlt Energy Limited IPO

• The company’s business is currently primarily dependent on the sale of ethanol. Any reduction in the sale of ethanol, or their ability to produce and sell ethanol, or in the price at which they are able to sell ethanol, may have an adverse effect on their business, results of operations, cash flows and financial condition.
• Their business is substantially dependent on the policies of the Government of India (GoI). Any change in GoI policies in this regard could have an impact on their revenue, results of operations and financial condition.
• The company’s ethanol production depends on the availability of raw materials such as sugar syrup/juice and molasses, and any alternatives they may require in the future, such as grains and biomass. Any shortage of sugarcane, the underlying raw material, which is subject to seasonal vagaries, adverse weather conditions, crop disease and pest attacks, may impact the availability and quality of their key raw materials, which may have an adverse impact on their business, financial condition and results of operations.
• The company is dependent on third party transportation providers for the supply of raw materials and delivery of their products. Any disruptions in logistics and transportation or significant increase in freight charges could adversely affect their business, financial condition and results of operations.

Anchor Investor Information

The Anchor Investor Bid/Offer Period shall be one Working Day prior to the Bid/Offer

Opening Date.

IPO Registrar and Book Running Lead Managers

Book running lead managers:

DAM Capital Advisors Limited SBI Capital Markets Limited

Registrar for the IPO is Bigshare Services Private Limited

Business Model

The company earns its revenue through the following sources:

• Producing and selling biofuels, particularly ethanol, which is derived from raw materials like sugar syrup and molasses. Future plans include manufacturing sustainable aviation fuel from ethanol.

Company Growth Trajectory

In fiscal 2023 and 2024, they produced 1,64,904 KL and 141,659 KL of ethanol, respectively, of which 70,238 KL and 89,675KL of ethanol was produced using molasses and 94,666 KL and 51,984 KL was produced using sugar syrup, respectively.

They achieved installed capacity for ethanol production of 1,400 KLPD as of March 31, 2024, based on the capacities of TBL Unit 1, TBL Unit 2 and TBL Unit 3. In comparison, these three units had an aggregated installed capacity of 590 KLPD as of March 31, 2022, when they were not part of the company. Even in the absence of any working capital limits in these periods, they achieved capacity utilisation of 74.06%, and 42.61% for ethanol and ENA in fiscal 2023 and 2024. Their operational growth is further demonstrated by the fact that in fiscal 2022, 2023 and 2024, their revenue from sale of ethanol amounted to nil, ₹70,080.78 lakhs and ₹95,635.79 lakhs, respectively, as per the Restated Financial Information. As per the Proforma Condensed Combined Financial Information, revenue from sale of ethanol was ₹39,961.07 lakhs, ₹63,382.75 lakhs and ₹1,03,610.59 lakhs in fiscal 2021, 2022 and 2023, respectively. In the same period, their profit after tax has zoomed from a loss of ₹1.23 lakhs to ₹31.8084 crores, demonstrating their ability to garner customers, strategise well, and manage resources and finances effectively.

Company Market Position

TruAlt Energy Limited Company is one of India’s largest biofuels producers, having strategically positioned itself as a prominent and diversified player in the biofuels industry, particularly in the ethanol sector. They hold the distinction of being the largest ethanol producer in India based on installed capacity, with an aggregate production capacity of 1,400 kilolitres per day (KLPD), as of March 31, 2024. Their market share is amongst the largest in terms of ethanol production capacity in fiscal 2024, at 3.7%.
(Source: CRISIL Report)

How To Check Allotment Status of TruAlt Energy Limited IPO?

You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar Bigshare Services Private Limited. To check the status on the BSE website:

• Visit the BSE website
• Click on “Investor Services” and choose “Application Status Check”
• Choose the issue type — Equity or Debt (Equity in this case)
• Select the Issue Name from the drop-down. The issue name is the company’s name, which is TruAlt Energy Limited
• Enter your application number or PAN number
• Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status

Follow these steps to know the allotment status on the registrar’s website:

• Visit the Bigshare Services Private Limited website
• Choose “Public Issues” from the “Investor Services” drop-down
• Select TruAlt Energy Limited from the drop-down
• Enter your PAN number or Application number
• Click on “Submit” to know the allotment status