The company is riding the wave of a growing demand for ethanol and compressed biogas amid the government’s push to promote biofuels. On the flip side, it also makes the company vulnerable to adverse changes in government policies. TruAlt Bioenergy, a biofuels producer, plans to raise ₹750 crore in fresh equity for capacity expansion and to meet working capital requirements, and ₹89 crore through an offer for sale. The promoter stake will fall to 70.5 per cent from 88.2 per cent after the IPO. The company is riding the wave of a growing demand for ethanol and compressed biogas amid the government’s push to promote biofuels. On the flip side, it also makes the company vulnerable to adverse changes in government policies or incentives that support the biofuels sector. Given the healthy growth in financials, the IPO looks suitable for long term retail investors with high risk appetite.
Business
TruAlt Bioenergy operates four distilleries in Karnataka with an operational ethanol production capacity of 1,800 kilo litres per day (KLPD) and an installed capacity of 2,000 KLPD as of March 31, 2025, giving it a 3.6 per cent share of India’s ethanol production capacity. It plans to raise the operational capacity to 2,000 KLPD by March 2026 and convert 1,300 KLPD of its mono-feed facilities to dual-feed, enabling ethanol production from both grain and sugarcane-based feedstocks. The company is also expanding into compressed biogas (CBG) through strategic partnerships. Its subsidiary Leafiniti has partnered with GAIL to develop multiple CBG units.
Financials
Revenue more than doubled to ₹1,908 crore in FY25 from ₹762 crore in FY23, while net profit rose to ₹146.6 crore from ₹35.5 crore. The operating margin before depreciation and amortisation (Ebitda margin) improved to 16.2 per cent from 13.8 per cent. Return on equity rose slightly to 28 per cent from 27 per cent during the period. Net profit margins also strengthened, expanding to 7.7 per cent from 4.7 per cent over the period. However, net debt increased to ₹1,400 crore in FY2025 from ₹1,145 crore in FY2023, reflecting ongoing capacity expansion and investments. While net debt-equity ratio fell to 1.8 in FY25 from 6.3 in FY24, it continued to remain higher than the range of 0.6 to 0.8 for some of the peers.
Valuation
The issue is valued at a trailing price-earnings (P/E) multiple of 29 based on post-IPO equity, which is lower than the P/E of 33 for Triveni Engineering & Industries but above that of 23.9 for Balrampur Chini Mills and 7.8 for Dalmia Bharat Sugar & Industries.
Anchor investment
PTI reported that the company said it has collected ₹252 crore from anchor investors on Wednesday, a day before its initial share-sale opens for public subscription. Tata Mutual Fund, HDFC MF, Bandhan MF, SBI General Insurance Company, Societe Generale, and Citigroup Global Markets Mauritius featured among the anchor investors, according to a circular uploaded on BSE website.
