Indian Gas Exchange (IGX) has filed its Draft Red Herring Prospectus (DRHP) with SEBI. The issue is entirely an offer for sale, as the company’s promoter group, Indian Energy Exchange, will divest 1.67 crore equity shares of Rs 10 each.
Axis Capital and Motilal Oswal Investment Advisors have been appointed as the investment bankers for the IPO, while KFin Technologies will act as the registrar to the issue. The subscription timeline for the offer has not been disclosed yet.
Indian Gas Exchange IPO: IEX to reduce stake to 25%
The gas trading exchange will not receive any proceeds raised through the IPO, and IGX, in its DRHP, said that through the offer it aims to achieve the benefits of listing, which will further help strengthen its position in the market.
Currently, IEX holds a 47.28% stake in the company, and under the Gas Exchange Regulations, it aims to reduce its shareholding to 25%.
“While our Promoter is proposing to divest a portion of its shareholding in the Company through offer for sale in the Offer, it will continue to hold a significant equity stake in our Company after the Offer and exercise significant influence over our business policies and affairs and matters requiring Shareholders’ approval,” the company said in its DRHP.
Indian Gas Exchange IPO: Key risks
An inability to maintain or grow trading volumes on our electronic exchange platform (“Exchange”) may adversely affect our business, financial condition, results of operations and cash flows.
The IGX IPO is vulnerable to several risks, some of which include an inability to grow trading volume on its electronic trading platform and disruptions in the supply of natural gas, which may adversely affect the company’s operations.
The company is mandated to comply with the regulatory requirements of the Natural Gas Regulatory Board (Gas Exchange) Regulations, 2020 (“Gas Exchange Regulations”); failing to do so may hamper its cash flows.
Changes in gas sector policies in India may also affect IGX’s business operations, and loss of access to the natural gas pipeline may severely impact its functioning. Additionally, revenue dependence on top ten participants, third-party reliance, and risks on debt repayments need to be monitored.
