TruAlt Bioenergy Ltd Gears Up for IPO to Expand Ethanol Production

TruAlt Bioenergy Ltd, a leading biofuel producer, has filed papers with Sebi for an IPO of Rs 750 crore accompanied by an OFS by promoters. The funds will support working capital, multi-feedstock operations, and general corporate purposes, as the company aims to enhance ethanol production capacity.

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 will comprise a fresh issuance of equity shares worth Rs 750 crore and an offer for sale (OFS) of up to 36 lakh equity shares by the company's promoters, according to the draft red herring prospectus (DRHP).

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

To support its funding goals, the company may consider raising Rs 150 crore under a pre-IPO placement. If successful, the fresh issue size will be reduced proportionately.

Proceeds from the fresh issuance are earmarked for various purposes: Rs 425 crore for working capital, Rs 172.68 crore for setting up multi-feedstock operations, and the remainder for general corporate purposes.

Based in Bengaluru, TruAlt Bioenergy focuses on ethanol production, boasting a daily capacity of 1,400 kilolitres (KLPD). The company plans to boost its production capacity by an additional 600 KLPD across three locations, aiming for 2,000 KLPD by October 2024.

TruAlt is also diversifying into second-generation (2G) ethanol, using surplus bagasse—a byproduct of sugar production—as a raw material. The company plans to use 800,000 MT of bagasse from promoter group companies to produce about 6 crore litres of 2G ethanol annually.

TruAlt's operations are significantly affected by the price and availability of raw materials like sugar syrup and molasses. To mitigate this, the company plans to shift focus to grain-based ethanol production. This strategic move aims to control material costs, optimize 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 for the company's IPO.

(With inputs from agencies.)