Trualt Bioenergy IPO: Check IPO Date, Lot Size, Price & Details

Business Overview:

Incorporated in 2021, TruAlt Bioenergy Limited is among India’s leading company in the biofuels sector. With an installed ethanol production capacity of 2,000 kilo litres per day (KLPD), the company ranks as one of the largest ethanol producers in the country, accounting for a 3.6% share of national capacity in Fiscal 2025.

TruAlt’s operations span ethanol production, compressed biogas (CBG), and allied by-products. Its subsidiary, Leafinity, operates a 10.20 TPD CBG plant, while strategic MoU’s with a Japanese gas major and Sumitomo Corporation Asia & Oceania Pte. Ltd. aim to establish a joint venture for three to five new CBG plants across India, accelerating capacity expansion in the clean energy value chain.

The company currently operates five distillery units in Karnataka, with four using molasses and syrup-based feedstock. Beyond first-generation ethanol, TruAlt is diversifying into second-generation ethanol, sustainable aviation fuel, Mevalonolactone (MVL) and allied biochemical, and biofuel dispensing solutions, positioning itself as a multi-segment bioenergy leader.

Additionally, ethanol production generates valuable co-products such as extra neutral alcohol (ENA), used in alcoholic beverages, and liquid CO₂ and dry ice, enhancing product integration and revenue streams.

IPO Synopsis:

Objective of the Issue:

• Funding capital expenditure towards setting up multi-feed stock operations – ₹150.68 Cr.
• Funding our working capital requirements – ₹425 Cr.
• General corporate purposes.

Strengths:

• Market Leadership in Ethanol Capacity:
  With five distillery units and 2,000 KLPD installed capacity, TruAlt is India’s largest ethanol producer. Strategic expansion aims to reach 4,600 KLPD, with fungible capacity enabling flexibility between grain and molasses feedstock. This scale positions the company to meet rising ethanol demand and capture government-backed blending opportunities.

• Integrated Infrastructure with Sustainable Technology:
  Operating in Karnataka’s sugar belt, TruAlt benefits from abundant feedstock availability, skilled labor, and logistical advantages. Its facilities employ advanced technologies like multi-pressure vacuum distillation and molecular sieve dehydration systems, enhancing efficiency and sustainability. Such infrastructure supports cost optimization, higher output, and long-term competitiveness in the biofuel sector.

• Poised to Capture Industry Tailwinds:
  India’s ethanol blending targets, incentives and favorable policies create strong growth opportunities. With ethanol, CBG, and allied by-products, TruAlt is poised to capitalize on rising renewable fuel demand. Government schemes and subsidies, coupled with sector growth forecasts, strengthen the company’s market position and support sustained revenue expansion.

• Strong Customer Base and Demand Pipeline:
  TruAlt leverages promoters’ industry connections to secure ethanol supply orders from OMCs under the EBP program, targeting 20% blending. Subsidiary offtake agreements for CBG under SATAT ensure steady demand. Residual waste sales as FOM further diversify revenue streams, building resilience and ensuring visibility in long-term demand pipelines.

Risks:

• Geographical Concentration:
  All production units are located in Bagalkot, Karnataka, making operations highly exposed to regional risks such as adverse weather, water shortages, crop diseases, or social and political disturbances. Any disruption could significantly affect supply, revenues, and overall performance due to lack of diversification in manufacturing locations.

• Underutilization of Production Facilities:
  Despite 2,000 KLPD installed capacity, operational utilization has remained below optimal at 74.06% in FY23, 42.63% in FY24, and 45.08% in FY25. Underutilization increases fixed cost burdens and pressures profitability. Future expansions will require higher utilization levels to maintain financial viability and protect margins.

• High Debt-to-Equity Ratio:
  The company’s capital structure reflects high leverage, with debt-to-equity at 2.02 in FY25, down from 6.37 in FY24. Heavy reliance on debt to finance operations increases repayment risks. Any delay in accessing affordable debt funding or meeting obligations could strain liquidity and cash flows.

• Promoter Share Pledging:
  Promoters have pledged equity shares in the past against loans. Post lock-in, shares will be re-pledged to lenders. Any default on such agreements could lead to enforcement of pledge rights, potentially impacting promoter control and investor confidence in the company’s governance and stability.

Financial Snapshot (Rs. In Crores):

Peer Comparison:

Conclusion:

TruAlt Bioenergy Limited stands as India’s largest ethanol producer by installed capacity (2,000 KLPD), giving it a strong volume-driven growth trajectory. While the management team is relatively new, the company benefits from the strategic oversight of promoter group head Mr. Murugesh Nirani, Founder and Chairman of the Nirani Group, ensuring stability and industry experience at the leadership level.

Financial performance has been robust, with Revenues expanding consistently over the past three years. In FY25, the company achieved EBITDA margins of 19% and PAT margins of 7%, supported by Operational efficiencies. However, there remains meaningful scope to enhance profitability through higher capacity utilization and diversification of raw material sourcing. The fungible use of both molasses and grain for ethanol production is expected to reduce dependence on sugarcane and further strengthen margins.

In peer comparison, TruAlt demonstrates clear operational superiority. Its EBITDA Margin is nearly 500 bps higher than Industry averages, PAT margins remain comparable, and Working Capital efficiency (26 days vs. 227 industry average) highlights a strong balance sheet position. Returns are also superior, with Higher ROE and ROCE metrics. The only key area for improvement remains Capacity Utilization, currently at 45% against industry’s 70%.

Considering its Leadership position in capacity, robust financial growth, favorable industry outlook under the Ethanol Blending Programme, and superior efficiency metrics.

We Recommend Subscribing to the IPO for Medium to Long-term Investors.