IRM Energy Ltd

Rating Action

• Long-term rating reaffirmed at Crisil AA-/Stable, outlook revised from Negative to Stable.
• Short-term rating reaffirmed at Crisil A1+.

Instruments / Facilities Rated

• Total bank loan facilities rated: Rs 700 crore.

Rating Agency

• Rating agency: Crisil Ratings Limited.

Rationale

• Outlook Stable reflects sustained operating improvement in FY2026 and Q1 FY2027.
• Net cash around Rs 205 crore as of 30 Jun 2026.
• Debt to EBITDA expected below 0.5–1x over the medium term.
• EBITDA per SCM rose to Rs 5.0 in FY2026 and Rs 10.5 in Q1 FY2027.
• Monopoly in awarded GAs provides revenue visibility; MWPs and gas pricing risks remain.
• Capex funded largely from internal accrual; external debt expected to stay minimal.
• Risks include project execution, gas availability and price volatility.

Outlook

• Stable.

Material Changes Since Last Rating

• Outlook revised from Negative to Stable; rating reaffirmed.

Key Financial Highlights

• FY2026 operating income Rs 1,160 crore; PAT Rs 53 crore; PAT margin 5.0%.
• Interest coverage 7.6x in 2026; 2025 PAT Rs 45 crore.
• Net cash around Rs 205 crore as of 30 Jun 2026.

Issue Overview

• IPO: equity shares; total size disclosed with revised net proceeds.
• Net proceeds revised downward due to undersubscription and higher expenses.
• Use of proceeds: capex for CGD network, debt prepayment, and general corporate purposes.

Utilisation of Proceeds

• Utilisation is as per Offer Document; aligned with management certifications.
• No material deviations or changes in means of finance.
• CGD capex object: ongoing with delays; significant unutilised funds.
• Borrowings prepayment object: fully utilised; no unutilised funds.
• General Corporate Purposes: fully utilised.
• Unutilised funds parked in fixed deposits and company current account.
• Delay causes: site identification and regulatory permissions for CGD network.
• Minor transfer from monitoring to current account for operational ease.

Governance and Compliance

• Approvals: reliance on management undertaking; no explicit shareholder approvals noted.
• Material events: CGD deployment delays due to site and permissions.
• Independence: MA notes no fiduciary relationship and no conflict of interest.
• Auditor stance: statutory auditor opinion not expressed on expenditure aspects.

GCP

• GCP utilised amount fully; allocation details not broken into sub-heads.
• GCP amount revised downward due to net proceeds changes.
• Board approval for GCP allocation not specified.

CFO transition

• Arunkumar Saluru relinquishes CFO and KMP roles, effective Aug 13, 2026.
• Ashish Maheshwari appointed CFO and KMP, effective Aug 14, 2026.
• Board authorizes Ashish Maheshwari to determine materiality and disclosures to stock exchanges.

Materiality disclosures

• Authorized signatories to determine materiality: Banerjee, Sharma, Maheshwari, and Soni.

Regulatory disclosures

• Disclosures to be made under SEBI Listing Regulations per board-approved policy.

Financial Performance

• Revenue from operations: INR 326 crore, up 24% YoY and 17% QoQ.
• EBITDA excluding other income: INR 62 crore, up 139% YoY.
• EBITDA margin at 19%; PAT INR 34 crore, up 140% YoY; PAT margin 10.5%.
• Q1 volumes: 50.9 MMSCM, up 8% YoY; CNG volume grew about 22% YoY.
• PNG contributed 33% of volume; PNG industrial volumes affected by the Mar 9, 2026 notification.
• Capex in the quarter: INR 67 crore; cumulative Capex: INR 1,090 crore.
• IPO proceeds utilized: INR 337 crore of INR 496 crore (68%) as of 30 Jun 2026; balance for Namakkal & Trichy expansion.

Operating Update

• CNG stations: 153 as of 30 Jun 2026; 564 dispensing points across four GAs.
• Banaskantha contributed ~48% of Q1 volume; Namakkal & Trichy together about 20%.
• Namakkal started CNG sales to TNSTC; 80 buses operational; more than 200 buses expected.
• Diu PNG fully converted; all commercial connections PNG.
• Hookups signed with Indian Oil, GAIL, and GSPL in Diu & Gir Somnath.
• MOUs signed with Somnath govt, Sanskrit University, and Trident Industries for PNG supply.
• Namakkal & Trichy: 6 MMSCM in Q1; YoY growth 102%.
• NGT Fatehgarh Sahib: February order; supply cut started 9 March; ramp expected if implemented.

Capex and Investments

• FY27 Capex plan: INR 250 crore; Namakkal/Trichy INR 150 crore; rest via GSPL tap-off and expansions.
• Tap-offs to GSPL for Diu & Gir Somnath; Banaskantha expansion reinforcement planned.
• Namakkal and Trichy infra rollout to drive volumes.

Guidance and Outlook

• FY27 revenue growth guidance around 25% YoY.
• Volume growth expected around 10-12% in FY27.
• EBITDA per SCM guidance for next three quarters: INR 7-8; this quarter ~INR 10.
• Long-term CGD fundamentals remain favorable; policy support and growing customer base.

Q&A Highlights

• There were no one-time items this quarter.
• Q1 EBITDA per SCM around INR 10; ongoing pricing and sourcing optimization supported.
• FY27 guidance implies about 25% revenue growth; volume growth around 10-12%.
• Namakkal volume 6 MMSCM in Q1; full year 25-30 MMSCM.
• Namakkal bus tie-up with TNSTC; >200 buses expected.
• The 2% promoter license fee is not guaranteed to continue.
• NGT Fatehgarh Sahib update: continued risk if implementation delayed.

Purpose of Meeting

• Scheme of Amalgamation of Enertech Distribution Management Private Limited with IRM Energy Limited and their shareholders.

Key Resolutions/Business

• Unsecured creditors to approve the Scheme under Sections 230–232.

Voting Outcome

• Outcome not yet determined; meeting scheduled Sept 12, 2026; e-voting and VC/OAVM voting to occur.

Shareholder/Creditor Impact

• Swap ratio 667:800; EDMPL to dissolve; EDMPL shareholders become IRM holders; swap ratio supported by GT Valuation and Fairness Opinion.

Next Steps

• NCLT Ahmedabad sanction and regulatory approvals required; scheme subject to orders.
• Remote e-voting window Sept 9–11, 2026; cutoff Sept 5, 2026.
• Exchange approvals and listing of new IRM shares on BSE/NSE.

Purpose of Meeting

• Scheme: Amalgamation of Enertech Distribution Management Private Limited with IRM Energy Limited.
• NCLT Ahmedabad directed equity-shareholder meeting; date: 12 September 2026, 10:30 IST; VC/OAVM.

Key Resolutions/Business

• Approval of the Scheme by requisite majority under Sections 230-232.
• Board authorized to give effect to the Scheme.

Voting Outcome

• Outcome to be determined; majority required: three-fourths in value; public-shareholder approval if applicable.
• Remote e-voting window: 9–11 September 2026; Meeting: 12 September 2026.

Shareholder/Creditor Impact

• Swap ratio: 667 IRM shares for 800 Enertech shares; Enertech Transferor shareholders to receive IRM shares.
• Transferor EDMPL to dissolve; EDMPL shareholders to receive IRM shares; IRM total paid-up capital unchanged.
• Post-scheme IRM listing on BSE/NSE.
• Rights of promoters/public shareholders preserved; post-scheme shareholding pattern to be published.

Next Steps

• Subject to NCLT sanction and regulatory approvals; conditions precedent to be satisfied.
• Effective date after conditions precedent; timeline to be disclosed.

Meeting Details

• Date and time: August 07, 2026 at 16:30 IST.
• Type and mode: earnings conference call (group), audio recording available online.

Participants

• Company participants: role of Company Secretary & Compliance Officer noted.

Purpose

• Post-result earnings conference call for quarter ended June 30, 2026.

Additional Notes

• Audio recording available on company website; no links provided.