TruAlt Bioenergy files IPO papers with Sebi; aims to mop up Rs 750 cr via fresh issue

Leading biofuel producer TruAlt Bioenergy Ltd has filed preliminary papers with capital markets regulator Sebi to raise funds through an initial public offering (IPO). The IPO is a mix of fresh issuance of equity shares worth Rs 750 crore and an offer for sale (OFS) of up to 36 lakh equity shares by promoters, according to the draft red herring prospectus (DRHP).

The OFS consists of up to 18 lakh equity shares each by Dhraksayani Sangamesh Nirani and Sangamesh Rudrappa Nirani.

The company may consider raising Rs 150 crore under the pre-IPO placement round. If such placement is completed, the fresh issue size will be reduced.

Out of the proceeds from the fresh issuance, Rs 425 crore will be utilised for funding working capital requirements, Rs 172.68 crore for setting up multi-feed stock operations, besides, a portion will be used for general corporate purposes.

Based in Bengaluru, TruAlt Bioenergy focuses on ethanol production, with a daily production capacity of 1,400 kilolitres(KLPD).

The company plans to boost its production capacity by an additional 600 KLPD across three locations and aims for 2,000 KLPD by October 2024.

TruAlt is diversifying into new areas like second-generation (2G) ethanol, utilising surplus bagasse -- a byproduct of sugar production -- as a raw material.

Also, the company plans to use 8,00,000 MT of bagasse from its promoter group companies to produce about 6 crore litres of 2G ethanol annually.

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, the company plans to shift its focus towards producing grain-based ethanol.

This strategic move will help control material costs, optimise revenue, and maintain consistent ethanol production.

TruAlt Bioenergy's revenue from operations was Rs 1,223.40 crore and profit after tax stood at Rs 31.81 crore in FY24.

DAM Capital Advisors and SBI Capital Markets are the book-running lead managers to the company's IPO.