TruAlt Bioenergy IPO Day 3: Weak Subscription but GMP Rises - What Investors Should Track

TruAlt Bioenergy Limited, India’s largest ethanol producer by capacity, launched its ₹839.28 crore IPO on September 25, 2025. The issue comprises a fresh issue of ₹750 crore and an OFS of ₹89.28 crore, with a price band of ₹472–₹496 per share. After a soft Day 1 response, Day 2 figures show overall subscription at 0.81 times, with QIBs at 0.86x, NIIs at 0.8x, and retail investors at 0.79x, indicating that demand remains subdued across categories. However, sentiment in the grey market has strengthened, with the GMP rising from ₹80 on Day 1 to ₹95 by Day 2, and further to ₹109 as day 3 starts. This reflects growing optimism despite muted institutional and retail participation so far, with investors closely eyeing whether Day 3 brings a sharper jump in bids.

IPO Overview

• IPO Date: September 25 to September 29, 2025
• Total Issue Size: ₹839.28 crore
• Price Band: ₹472 to ₹496 per share
• Lot Size: 30 Shares
• Tentative Allotment Date: September 30, 2025
• Listing Date: October 3, 2025 (Tentative)
• Subscription Status: 0.81x as of day 2
• GMP: The GMP for TruAlt Bioenergy IPO is ₹109, reflecting a 21.98% gain over the issue price, according to Chittorgarh.com (as of September 26).
  Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

Highlight of Day 2 of the IPO

By the close of Day 2, TruAlt Bioenergy IPO was subscribed 0.81 times, with QIBs at 0.86x, NIIs at 0.8x, and retail investors at 0.79x. While demand across categories stayed uneven, the GMP showed improvement, climbing from ₹80 on Day 1 to ₹95 on September 26, 2025. This signals growing confidence in listing gains, though actual demand pickup remains to be seen on the final subscription day.

Highlight of Day 1 of the IPO

On Day 1, TruAlt Bioenergy IPO subscribed just 0.46 times, with QIBs showing the most activity at 0.89x, while Retail and NII participation was weak at 0.31x and 0.25x. The GMP, however, remained steady at ₹80, indicating consistent but not growing investor interest. With implied listing gains of around 16%, the IPO’s next two days will be critical in gauging sentiment.

What Does TruAlt Bioenergy Do?

TruAlt Bioenergy is in the green energy space, primarily making biofuels with ethanol at its core. Ethanol is simply a type of alcohol blended with petrol to reduce crude oil imports. TruAlt sells ethanol mainly to public Oil Marketing Companies (like Indian Oil, Bharat Petroleum, and HPCL) as part of India’s national blending program.

The company runs five distillery units in Karnataka, using feedstock like sugarcane juice and molasses to make ethanol. It is expanding into maize and surplus rice-based ethanol to avoid seasonal dependence on sugar. Alongside ethanol, it produces related products like Extra Neutral Alcohol (used in liquor), liquid CO2, and dry ice. Through its subsidiary, Leafiniti Bioenergy, it also produces compressed biogas (CBG).

Objectives of the IPO

The IPO funds will be used for three main purposes:

• ₹150.68 crore for CapEx - converting one distillery into a multi-feed unit that can switch between sugarcane and grain feedstocks.
• ₹425 crore for working capital - to buy and store raw material (molasses, sugarcane juice, grains) and keep plants running year-round.
• Balance funds for general corporate purposes - like brand building, marketing, business development, and contingencies.

Strengths:

• Largest ethanol player in India: Installed capacity of 2,000 KLPD (1,800 KLPD operational), giving it an edge in volume.
• Strong revenue and profits: FY25 revenue at ₹1,907 crore and profit of ₹146.6 crore, a solid turnaround in just four years since incorporation.
• High return for investors: RoE of 28.27% in FY25, meaning the company generated ₹28 profit for every ₹100 invested by shareholders.
• Better margins than peers: EBITDA margin at 16.2% vs 7-13% peer range.
• Efficient operations: Working capital days at only 26 vs industry average of 200+ days.
• Future-ready strategy: Plans to scale CBG, sustainable aviation fuel (SAF), and biofuel retail stations.

Risks:

• Concentration of customers: 99.8% of sales in FY25 came from just 10 customers (mostly OMCs). Losing even one would hurt badly.
• High debt levels: Net debt-to-equity at 1.82x, making it more exposed compared to peers who are below 1x.
• Low capacity utilization: Only 45% in FY25 vs peer range of 68-77%.
• Seasonal dependence: Sugarcane molasses supply is seasonal, pushing prices up in the off-season. Weather disruptions could add risk.
• Related-party deals: Over ₹1,181 crore of transactions in FY25 happened with promoter-linked entities.
• Geographic risk: All units are concentrated in Bagalkot, Karnataka-leaving it vulnerable to local disruptions.

For detailed information, visit TruAlt Bioenergy’s IPO page.

Peer Comparison

The company competes with Balrampur Chini Mills, Triveni Engineering, and Dalmia Bharat Sugar.

• TruAlt leads in capacity (1,800 KLPD) vs 1,050 for Balrampur and 860 for Triveni.
• TruAlt has highest EBITDA margin (16.2%) beating Balrampur (13.65%), Triveni (6.99%), and Dalmia Sugar (12.5%).
• TruAlt’s RoE is 28.3%, way ahead of peers like Balrampur (12.1%) and Triveni (7.9%).
• TruAlt beats peers in working capital efficiency (26 days vs 200+ for peers).
• But, TruAlt lags peers in scale of revenue (₹1,907 crore vs ₹5,400-6,800 crore for bigger sugar players).
• Its debt levels (1.82x) are the highest in the sector, increasing risk.
• Low capacity utilization (45%) hurts efficiency, compared to 70%+ at peers.

Source: RHP, internal calculation

IPO Valuation

At the upper price of ₹496, TruAlt commands a post-IPO market cap of ₹4,253 crore. The P/E ratio based on FY25 earnings is 29x, higher than peers (Balrampur 23.9x, Triveni 33x, Dalmia 7.7x). On RoE and margins, TruAlt looks superior and appears to deserve some premium, but the higher debt and low utilization remain red flags.

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent FY25 net profits at the upper end of the price band.

Who Leads TruAlt Bioenergy?

The company is led by its promoter family-the Niranis. Vijaykumar Murugesh Nirani, founder and Managing Director, studied business at James Cook University and has been an industrialist for nine years. He also directs its subsidiary, Leafiniti Bioenergy. His younger brother, Vishal Nirani, serves as Executive Director with six years of operational experience. Sushmitha Vijaykumar Nirani, a non-executive director, brings an engineering background to the board.

The Chairperson, Y.B.R. Ramakrishna, is a seasoned biofuel expert who advises the Ministry of Petroleum. Supporting them is Anand Kishore (CFO), formerly at leading banks, who joined in 2024 and has 15 years of experience in finance. Deepak Kumar Gulati, the Company Secretary, has over 16 years of compliance experience. The leadership team combines new-generation promoters with seasoned professionals, bridging entrepreneurial drive and institutional discipline.

The Money Makers from the IPO

The OFS totals ₹89.28 crore, entirely by promoter group members. Dhraksayani Sangamesh Nirani is selling 9,00,000 shares, worth about ₹44.64 crore, realizing a remarkable 31x return on her investment cost of ₹15.96 per share. Similarly, Sangamesh Rudrappa Nirani is selling another 9,00,000 shares for the same ₹44.64 crore, cashing out at 29x his cost of ₹17.08 per share.

While the amounts are modest compared to overall IPO size, the high multiples show the enormous wealth creation early backers have already locked in. Importantly, since proceeds go to these promoters, this part of the issue does not add fresh funds to the company.

Industry Outlook

India’s ethanol industry is on a strong footing. Demand is driven by the government’s Ethanol Blending Program, requiring petrol to be mixed with ethanol to reduce dependence on imported crude. The ethanol blending market in India is projected to grow from 828 crore litres in FY23 to 1,350 crore litres by FY26, at a CAGR of 17.7%. The government is also pushing compressed biogas (CBG) and sustainable aviation fuels (SAF), opening new growth segments for companies like TruAlt. However, challenges like reliance on seasonal crops, potential conflict with food supplies, and high customer concentration remain industry-wide risks.

Analyst View

TruAlt Bioenergy offers scale, a government-backed ethanol demand story, and strong financial metrics like high margins, efficient working capital, and healthy RoE. Its diversification into biogas and sustainable aviation fuel also adds long-term appeal. However, subscription trends at the end of Day 2 remain lacklustre at just 0.81 times overall, showing hesitation from both retail and non-institutional investors, while QIBs are yet to fully commit. On the other hand, the GMP has climbed steadily from ₹80 before launch to ₹95 by Day 2, suggesting that expected listing gains could improve if momentum holds. At a valuation of around 29x P/E, the IPO still looks expensive, leaving a limited cushion against risks such as high leverage, customer concentration, and underutilized assets. Optimistic investors may view the rising GMP as a positive sentiment marker, while cautious participants might wait to see stronger institutional demand on the final day before forming decisions.

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Disclaimer

Source: TruAlt Bioenergy' RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.