IPO closes on 26 Jun'25
Ellenbarrie Industrial Gases Ltd
Minimum Investment
₹ 14,800 / 37 shares
Grey market premium
₹ 7 (2% premium)
Our Verdict:
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- Ellenbarrie Industrial Gases Ltd (EIGL) has delivered robust financial performance in recent years, marked by consistent growth in both revenue and profitability. The ongoing capacity expansions are expected to further support this growth over the next two years.
- However, the company’s ability to successfully execute these expansions and attract customers in new regions will be critical to fully monetizing the additional capacity. As of FY24, EIGL held only 2.68% market share, compared to 27.49% held by its listed peer, Linde India.
- Valuation-wise, the IPO commands a P/E multiple of 63x based on FY25 earnings, which is considerably lower than Linde’s 125x. On the profitability front, EIGL leads with a higher EBITDA margin of 35.12% Vs Linde’s 30.78%, a stronger PAT margin of 23.90% Vs 17.81% and a better ROE of 10% compared to Linde’s 6.14%.
- While the company’s fundamentals and expansion strategy indicate long-term potential, much of the growth appears to be factored into the current valuation. As a result, meaningful listing gains may be unlikely, but investors with a long-term horizon may consider subscribing.
About the company
Founded in
23 Nov'73
Managing director
Padam Agarwala
- EIGL has over five decades of operational experience in the industrial gas sector, specializing in the production of oxygen, nitrogen and argon, along with additional capabilities in hydrogen and synthetic air. The company serves a wide range of industries, including steel, glass and defence.
- EIGL has established a strong presence in eastern and southern India, particularly in West Bengal, Andhra Pradesh and Telangana. It operates nine plants and boasts a robust delivery infrastructure that includes pipelines, tankers and cylinders.
STRENGTHS
- Market Positioning: EIGL is among the largest industrial gas manufacturers in East and South India, and the market leader in West Bengal, Andhra Pradesh and Telangana based on installed capacity as of March 31, 2025.
- Robust Financial Growth: From FY23 to FY25, EIGL delivered a solid CAGR of 23% in operational revenue, 81% in EBITDA and 72% in net profit.
- Healthy Return Metrics: EIGL demonstrates strong operational efficiency with impressive return metrics— Return on Equity (RoE) at 17% and Return on Capital Employed (RoCE) at 14% in FY25.
- Expanding Profit Margins: Profitability has steadily improved, with EBITDA margins increasing from 16.38% in FY23 to 35.12% in FY25 and net profit margins rising from 12.58% to 23.90%, surpassing its listed peer.
- Diverse and Loyal Customer Base: In FY25, EIGL served 1,829 customers across industries. Its top 5 and top 10 customers have maintained relationships averaging 8.4 years and 7.7 years, respectively, as of March 31, 2025.
RISK FACTORS
- Client Concentration: As of March 2025, approximately 47% of EIGL’s revenue is derived from its top 10 customers. A decline in business from these key customers could adversely affect its operations and results.
- Geographic Concentration: Five of EIGL’s nine facilities are located in West Bengal. Adverse events in this region could disrupt manufacturing operations and, in turn, affect the company's overall business and results.
- Legal Risks: EIGL, along with its directors and promoters, is currently facing legal cases totalling approximately Rs 15.8 crore. Adverse outcomes from these legal proceedings could harm the company's reputation and business prospects.
- Trade Receivables: As of FY25, trade receivables stand at Rs 83.6 crore, representing around 27% of operational revenue. Failure to collect receivables or defaults in payment from customers may impact profits and result in strained cash flows.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 852.53 crore
Fresh Issue
₹ 400 crore
OFS
₹ 452.53 crore
Price range
₹ 380 - 400
Lot size
37 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for the following purposes:
- Repayment or pre-payment of certain outstanding borrowings;
- Establishing a 220 TPD air separation unit at the Uluberia-II plant; and
- General corporate purposes.
Dates
Bidding open
24 Jun'25
Bidding close
26 Jun'25
Allotment date
27 Jun'25
Refund date
30 Jun'25
Listing
1 Jul'25
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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