Shubhshree Biofuels Energy is launching an IPO with a book-built issue size of ₹16.56 crore. This IPO involves a fresh issue of 13.92 lakh shares. Subscription for the IPO begins on September 9, 2024, and concludes on September 11, 2024. The allotment is expected to be finalised on September 12, 2024, with the shares slated to list on NSE SME on September 16, 2024.
The price band for the Shubhshree Biofuels Energy IPO is set between ₹113 and ₹119 per share. Retail investors must apply for a minimum of 1,200 shares, requiring an investment of ₹142,800. For High Net-Worth Individuals (HNIs), the minimum investment is for 2 lots (2,400 shares), amounting to ₹285,600.
Hem Securities Limited is the book-running lead manager, and Bigshare Services Pvt Ltd will act as the registrar. Hem Finlease is appointed as the market maker for this issue.
Industry Outlook:
- The global biofuel market is expected to grow at a CAGR of 8.5% from 2023 to 2030, reflecting rising demand for sustainable fuel alternatives. The Indian government’s mandate for biomass blending in coal-based power plants is set to increase from 5% to 7% over the next 2 years.
- India’s policy requires a 5% biomass blend in coal power plants by 2024, increasing to 7% by 2026. This regulatory framework supports biofuel adoption and market expansion.
Shubhshree Biofuels Energy IPO Objectives
The company plans to allocate the net proceeds from the issuance to the following purposes:
- ₹212.52 lakh will be used for installing new plant and machinery.
- ₹900.00 lakh will be allocated to meet the working capital needs of the company.
- The remaining part of the proceeds will be used for general corporate purposes.
About Shubhshree Biofuels Energy Limited
Shubhshree Biofuels Energy Limited focuses on manufacturing and supplying biomass fuels, including pellets and briquettes. These biofuels serve as alternatives to traditional fossil fuels for heating, cooking, and electricity generation. The company’s products help reduce greenhouse gas emissions by using recycled green waste such as agri-waste and sawdust.
Established in 2013, Shubhshree initially produced building materials but transitioned to biomass fuels in December 2021. By October 2023, the company set up a new manufacturing facility in Rajasthan, equipped with machines capable of producing 132 tonnes of biomass per day. In fiscal year 2024, Shubhshree’s biomass fuel sales surged to approximately 121,800 tonnes, with a revenue increase to ₹9,414.60 lakh.
The company benefits from government mandates requiring thermal power plants to blend biomass with coal, which boosts demand for its products. Shubhshree’s main markets are in Northern India, with key customers in the pharmaceutical and power sectors.
Peer Details
According to RHP, there are no listed companies in India engaged in a business similar to Shubhshree Biofuels Energy Limited.
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Contact Details of Shubhshree Biofuels Energy IPO
- Registered office: Plot No. 8 Ganesh Vihar B, Pandit T.N Mishra Marg, Nirman Nagar, Shyam Nagar (Jaipur), Jaipur, Rajasthan, India, 302019.
- Phone: +91 9799998880
- E-mail: shubhshree@biomassfuel.co.in
IPO Financials
| Particulars | Year ending on March 31, 2024 | Year ending on March 31, 2023 |
|---|---|---|
| Revenue from Operation (in ₹ lakh) | 9414.60 | 5861.60 |
| Profit After Tax (PAT) (in ₹ lakh) | 329.77 | 242.38 |
| Reserves & Surplus (in ₹ lakh) | 326.27 | 255.50 |
| Net Worth (in ₹ lakh) | 711.27 | 256.50 |
| Total Borrowings (in ₹ lakh) | 60.66 | 91.06 |
| Return on Equity (%) | 68.15 | 179.13 |
| Return on Capital Employed (RoCE) (%) | 61.67 | 94.32 |
| Earnings Per Share (in ₹) | 8.60 | 6.34 |
Know before investing
Strengths
6Factory location in Rajasthan ensures quick, cost-effective raw material sourcing.
Customer-centric focus ensures high-quality products and timely deliveries.
Eco-friendly biofuels offer a sustainable alternative to fossil fuels.
Experienced promoters and management drive the company’s growth and strategy.
Government mandates increase demand for biomass fuels in power plants.
New facility boosts production capacity, enhancing the share of manufactured goods.
Risks
6Past net losses may impact future profitability and operational stability.
Resistance to adopting biomass fuels can hinder market growth.
Reliance on third-party suppliers poses risks to supply continuity.
Revenue depends heavily on a few key clients, increasing volatility.
Geographic concentration in northern India heightens regional risk exposure.
Seasonal variations in raw material availability affect production and sales.
