IRM Energy IPO: 10 key risks investors should know before investing

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₹545.40-crore IRM Energy IPO opened on October 18 and the allotment is expected to be finalized on Friday, October 27, 2023. IRM Energy IPO is completely a fresh issue of 1.08 crore equity shares and there is no offer for sale (OFS) component. The IPO price band has been fixed in the range of ₹480 to ₹505 per equity share.

IRM Energy develops natural gas distribution projects for residential, commercial, industrial and automotive users within the designated geographic areas. The company's promoters are Cadila Pharmaceuticals Limited, Dr. Rajiv Indravadan Modi, and IRM Trust.

Here are some of the key risks listed by the company in its Red-Herring Prospectus (RHP): - IRM Energy is dependent on third parties for sourcing and transportation of natural gas. As of June 30, 2023, it procured natural gas from seven suppliers which constituted 100% of its total quantity purchased. Any disruption in the receipt of such natural gas from these third parties, or delay or default in timely transportation of the natural gas could lead to a disruption or failure in the supply of natural gas by it, which could adversely affect its business, reputation, results of operations and cash flows.

- There are two criminal litigations, 29 regulatory actions and 12 material tax litigations as per the Company’s Materiality Policy, involving their promoters. In the event of any adverse outcome, the company’s and their promoter’s business operations and reputation may be affected. Also Read: IRM Energy IPO Day 3: Check GMP, subscription status, should you subscribe? - Two of the company’s Directors, namely Maheswar Sahu and Rabindra Nath Nayak, are on the board of directors of a listed company, Diamond Power Infrastructure Limited, whose shares have