TruAlt Bioenergy
- TruAlt Bioenergy is coming out with a 100% book building; initial public offering (IPO) of 1,76,89,830 shares of 10 each in a price band Rs 472-496 per equity share.
- Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
- The issue will open for subscription on September 25, 2025 and will close on September 29, 2025.
- The shares will be listed on BSE as well as NSE.
- The face value of the share is Rs 10 and is priced 47.20 times of its face value on the lower side and 49.60 times on the higher side.
- Book running lead managers to the issue are DAM Capital Advisors and SBI Capital Markets.
- Compliance Officer for the issue is Deepak Kumar Gulati.
Profile of the company
TruAlt Bioenergy is one of India’s largest biofuels producers, having strategically positioned itself as a prominent and diversified player in the biofuels industry, particularly in the Ethanol sector. It holds the distinction of being the largest Ethanol producer in India based on installed capacity, with an aggregate installed capacity of 2,000 kilo litres per day (KLPD) and an operational capacity of 1,800 KLPD, as of March 31, 2025. The company’s market share is amongst the largest in terms of Ethanol production capacity in Fiscal 2025, at 3.6%.
The company has received approval from the Ministry of Petroleum and Natural Gas, Government of India, to exercise retail marketing rights to market motor spirit and high-speed diesel. The approval is subject to conditions including net worth criteria, requirement to set up at least 5% retail outlets in notified remote areas, furnishing of bank guarantees, and requirement for permission from the government for expansion of retail outlets beyond the 100 retail outlets proposed in its application form.
In addition to conventional fuels, the company is required to install facilities for marketing at least one new generation alternate fuel at its proposed retail outlets within three years of operationalization of the said outlet, subject to it complying with various other statutory guidelines. There shall not be any restriction on an authorized entity such as the company from utilizing the same retail outlet premises for sales of other new generation transportation fuels by other companies, subject to the company complying with all statutory guidelines as applicable.
Proceed is being used for:
- Funding capital expenditure towards setting up multi-feed stock operations to pave- way for utilizing grains as an additional raw material in ethanol plants at TBL Unit 4 of 300 KLPD capacity
- Funding its working capital requirements
- General corporate purposes
Industry Overview
The global fuel industry is a critical component of the world economy, dominated by fossil fuels such as oil, coal, and natural gas. These resources continue to supply most of the world's energy needs, powering transportation, industries, and households. However, there has been a growing push for renewable and sustainable alternatives given climate change and environmental degradation. India currently accounts for approximately 6.5% of primary energy supply, and this share is projected to report a CAGR 9.8% by 2050 according to current policy scenarios. To address this increasing demand for hydrocarbon fuels, India has implemented several key strategies. These strategies encompass attracting investments in Exploration and Production to boost domestic oil and gas production, transitioning towards a gas-based economy, adopting technological advancements to enhance refinery processes, improving energy efficiency and productivity, promoting the biofuel sector, expanding its international oil and gas portfolio, and diversifying sources of oil and gas supply.
Meanwhile, the annual global demand for biofuels is expected to grow by 2.3% during 2022-2026, reaching a total of 18,600 crore litre. USA leads the volume increase, however, much of the growth is a rebound after the pandemic drop. Asia accounts for almost 30% of new production over the forecast period, overtaking European biofuel production by 2026, due to the strong domestic policies, growing liquid fuel demand and export-driven production in the South Asian countries. India is expected to contribute much to the growing biofuel production in Asia due to its recent ethanol policies and blending targets, potentially making it the third largest market for ethanol by 2026.
The global biodiesel market has experienced significant growth in the recent past and is expected to continue to on an upward trajectory driven by rising environmental concerns, government policies, and increasing demand for sustainable energy sources. The global biodiesel market is expected to grow at approximately 2% CAGR between 2023-2028. Going forward, the biofuel market, globally, has seen a rise in the past years owing to the endeavours of various governments to reduce fuel import bill and shift towards the use of renewable energy sources. USA and Brazil have always been at the forefront of biofuel adoption with their early practices in adopting waste-to-fuel technology. With increased global concerns towards climate change and increased promises for Net Zero Emission Targets globally, more countries have realised the importance of Biofuels in the total fuel mix for consumption and have increased biofuel share in their total consumption.
Pros and strengths
Largest installed capacity for production of ethanol in India: The company is largest producer of Ethanol in India in terms of installed capacity. Currently, it has established five distillery units in Karnataka. As of March 31, 2025, four of its molasses and sugar syrup-based distillery units were operational, and it had an aggregate operational ethanol production capacity of 1,800 KLPD and installed capacity of 2,000 KLPD. In a limited operating period, the company has been able to grow its business as a result of its strategic utilization of its production capacity. At the same time, the company has adopted a focused expansion pathway including diversifying its raw material base for Ethanol production. Of its anticipated total installed capacity of 2,000 KLPD, 1,300 KLPD is proposed to be fungible, being capable of using grain as well as sugar syrup/sugarcane juice and molasses as raw materials for Ethanol production, and is to be commissioned by Fiscal 2026.
Integrated resource management, creating scalable operations: The company is able to differentiate itself through its ease of access to raw materials, as the bulk of the sugar syrup/sugarcane juice and molasses that it requires for Ethanol production are procured from sugar manufacturing facilities owned by entities forming part of its Promoter Group. Further, its Promoter Group company has the ability to supply adequate amounts of raw material even following its proposed capacity expansion. As of March 31, 2025, the Promoter Group entity from whom it sources sugar syrup/sugarcane juice and molasses, has a sugarcane crushing capacity of 79,000 tonnes crushed per day. Its crushing capacity includes 79,000 TCD production capacities for molasses and sugarcane syrup/juice per day. In Fiscal 2025, operating at its existing operational capacity of 1,800 KLPD, the company utilized 3,74,676 MT of sugar syrup/sugarcane juice, and 3,60,825 MT of molasses, for its operations.
Strategically Located Production Infrastructure: The company owns five distillery units and operates four distillery units in the Bagalkot district of Karnataka, which holds a significant position as part of India’s sugar belt. The state is a major player in sugar production, which provides a readily available feedstock for Ethanol manufacturing. The availability of ample sugarcane resources, combined with the incentive scheme, places Karnataka in a favorable position to not only support the state's Ethanol initiatives but also boost its economy and contribute to the national Ethanol production targets. The company’s location allows it access to key customers as well as skilled labourers and provides a logistical advantage by significantly reducing transit times and costs, enhancing its operational efficiency.
Well-positioned to capture favourable industry tailwinds: The biofuel market in India is majorly divided into Ethanol, CBG and biodiesel currently, of which Ethanol forms a major chunk. The Indian biogas market is expected to grow up to $2.25 billion in 2029, at a CAGR of 6.3% between 2022 and 2029. As part of its product portfolio, the company produces Ethanol and CBG. Along with Ethanol, the Government of India is looking forward to exploring CBG as an addition in the biofuel mix of the country.
Risks and concerns
Limited operating history: The company has a limited operating history, as it commenced ethanol production pursuant to business transfer agreements in September 2022. It may be subject to liabilities and other risks arising out of the business transfer agreements, and it may not be able to derive the anticipated benefits from these acquisitions.
Majority of revenue comes from limited customers: The company derived a significant portion of revenue from limited customers, in particular oil marketing companies (OMCs). The company has garnered 76.06% 90.86% and 89.21% of its total revenue from OMCs in FY21, FY22 and FY23 respectively. The loss of one or more such customers, or a reduction in their demand for its products may adversely affect its business, results of operations, financial condition and cash flows.
High debt to equity ratio: The company’s debt to equity ratio as of March 31, 2023, 2024 and 2025 was 4.78, 6.37 and 2.02, respectively. This signifies its reliance on debt to support its operational requirements. As such, timely availability of commercially viable means of debt finance is expedient for its business and operations. Any disruption in this regard, may adversely affect its business, results of operations and cash flows.
Subject to seasonality in its operations: The company’s production of ethanol influenced by the availability of its basic raw material, sugar syrup/juice and molasses. In addition, owing to the seasonal variation in sugarcane supply, there is heavy fluctuation in the price at which ethanol producers are able to obtain sugarcane juice and molasses, although the Government of India sets floor prices for ethanol sourced from various feedstock. The 'off-season' for sugarcane crushing, between April to September, witnesses a steep increase in the price of molasses in the open market, in addition to reduced availability.
Outlook
TruAlt Bioenergy is engaged in the production of biofuels, with a primary focus on the ethanol sector. It is one of the largest Ethanol producers in India based on installed capacity. In Fiscal 2025, it has a 3.6% market share in ethanol production capacity. The company has strategically located production infrastructure, with a focus on technological innovation and sustainability. On the concern side, the company has a limited operating history, as it commenced ethanol production pursuant to business transfer agreements in September 2022. It may be subject to liabilities and other risks arising out of the business transfer agreements, and it may not be able to derive the anticipated benefits from these acquisitions. Moreover, the company’s business is dependent on its production units, each of which are located in the Bagalkot district of Karnataka, and it is subject to certain risks in its production processes.
The issue has been offering 1,76,89,830 shares in a price band of Rs 472-496 per equity share. The aggregate size of the offer is around Rs 834.96 crore to Rs 877.42 crore based on lower and upper price band respectively. Minimum application is to be made for 30 shares and in multiples thereon, thereafter. On performance front, the company’s revenue from operations increased by 55.94% from Rs 1,22,340.47 lakh in Fiscal 2024 to Rs 1,90,772.40 lakh in Fiscal 2025, primarily due to increases in sale of finished goods. Moreover, the company’s restated profit after tax for the year was Rs 3,180.79 lakh in Fiscal 2024, compared to restated profit after tax for the year of Rs 14,663.85 lakh in Fiscal 2025.
The company is diversifying its feedstock for Ethanol production by adding grains as additional feedstock. Within its existing distillery units, it proposes to set up dedicated segments for pre-treatment and dried distillers grain solids production units. These will be utilized to offset the idle capacity during seasons when sugar is available in reduced quantities. By customizing its existing distillery units for both grain-based Ethanol and sugarcane-based Ethanol production, the company will be able to optimize its production capacity and efficiencies and mitigate risks associated with seasonal availability of sugarcane, while effectively navigating fluctuation in prices of raw material and finished goods.
