TruAlt Bioenergy Ltd, a leading producer of biofuels, has submitted initial documentation to the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO). The proposed IPO will involve a dual structure: a fresh issuance of equity shares totaling Rs 750 crore and a sale of up to 36 lakh equity shares through an offer for sale (OFS) by the company’s promoters.
According to the draft red herring prospectus, the OFS will include a sale of 18 lakh equity shares each by promoters Dhraksayani Sangamesh Nirani and Sangamesh Rudrappa Nirani. Additionally, the company is contemplating a pre-IPO placement round to raise Rs 150 crore. Should this placement proceed, it will lead to a reduction in the size of the fresh issue.
The funds raised from the fresh issuance will be allocated to various purposes: Rs 425 crore will be directed towards meeting working capital needs, Rs 172.68 crore will be invested in establishing multi-feedstock operations, and the remainder will be used for general corporate purposes.
TruAlt Bioenergy, headquartered in Bengaluru, specializes in ethanol production and currently operates with a daily production capacity of 1,400 kilolitres per day (KLPD). The company has ambitious plans to increase its production capacity by an additional 600 KLPD across three new locations, aiming to reach a total production capacity of 2,000 KLPD by October 2024.
In a strategic move towards innovation, TruAlt is also expanding into second-generation (2G) ethanol production. This involves utilizing surplus bagasse, a byproduct from sugar manufacturing, as a raw material. The company plans to leverage 8,00,000 metric tons of bagasse sourced from its promoter group companies to produce approximately 6 crore litres of 2G ethanol each year.
The company’s financial performance is closely tied to the prices and availability of key raw materials such as sugar syrup and molasses. To mitigate dependency on these seasonal inputs, TruAlt is shifting its focus towards grain-based ethanol production. This transition is expected to help control material costs, enhance revenue stability, and ensure consistent ethanol production.
For the fiscal year 2024, TruAlt Bioenergy reported revenue from operations of Rs 1,223.40 crore and a profit after tax of Rs 31.81 crore. DAM Capital Advisors and SBI Capital Markets are serving as the book-running lead managers for the IPO.
TruAlt Bioenergy Ltd, based in Bengaluru, is a prominent biofuel producer specializing in ethanol. With a current daily production capacity of 1,400 kilolitres, the company plans to expand to 2,000 KLPD by October 2024. TruAlt is diversifying into second-generation ethanol using surplus bagasse and aims to enhance production efficiency and reduce material costs.
