TruAlt Bioenergy
IPO Size: Rs. 839 cr
- Fresh Issue of Rs. 750 cr for (i) working cap Rs. 425 cr (ii) capex Rs. 151 cr
- Offer for Sale (OFS) of Rs. 89 cr by the promoter (88% stake to drop to 71% post IPO) Price band: Rs. 472-496 per share
M cap: Rs. 4,253 cr, implying 20% dilution
IPO Date: Thu 25th Sep to Mon 29th Sep 2025, Listing Fri 3rd Oct 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
India’s Largest Ethanol Producer, with 3.6% market share
TruAlt Bioenergy is a 4 year old Karnataka based biofuel producer, with 2,000 kilo litre per day (KLPD) installed capacity for ethanol, of which 1,800 KLPD is operational, as of 31.3.25, with 45% utilisation. It enjoys 3.6% market share in ethanol, with an installed capacity being ~2x of sugar producers Balrampur, Dalmia and Triveni Engineering.
Company also has 10.2 TPD installed capacity of compressed bio gas (CBG), which is ~86% utilised, and is undertaking joint venture with Sumitomo Japan and GAIL for the same. Besides plans forward integration to sustainable aviation fuel (SAF).
Capex to diversify Feedstock
Over the next couple of months, TruAlt plans to make 2,000 KLPD capacity partly-fungible i.e.1,300 KLPD can use grains instead of sugarcane derivatives as feedstock. Currently, company sources raw material (entire sugarcane syrup and 79% of molasses requirement) from promoter group company, which is a big business risk.
Growing Financials
Company is eligible under Nabard’s interest subvention scheme, beginning FY24 to FY28, and hence received interest income of Rs. 59 cr in FY25.
FY25 revenue was at Rs. 1,908 cr, more than doubling in two years, from Rs. 762 cr in FY23. Net margin rose from 4% to 7% in FY25, leading to PAT of Rs. 147 cr and an EPS of Rs. 21.
Valuation
M cap of Rs.4,253 cr implies a historic PE of 23x, which is not expensive for the growth opportunity. It is inappropriate to compare TruAlt to sugar companies. In Aug 2024, promoter did Rs.125 cr secondary at Rs. 491 per share, and after 13 months, similar price is offered in IPO.
Under the Ethanol Blending Program, government has advanced blending to 20% (E20) from 2030 to 2026, which will benefit the company, besides diversifying into other products.
30th Sep 2025 at 03:04 pm