Ellenbarrie Industrial Gases IPO analysis

Ellenbarrie Industrial Gases IPO (initial public offering) will open for subscription on June 24 and close on June 26, 2025. Below is a breakdown of the industrial gas producer’s strengths, weaknesses and growth prospects to help investors make an informed decision. Ellenbarrie Industrial Gases IPO in a nutshell Quality: During FY22-24, the company reported an average return on equity (ROE) and return on capital employed (ROCE) of around 13 and 14 per cent, respectively. Growth: Between FY22 and FY24, its revenue and profit after tax grew around 23 and 72 per cent per annum, respectively. Valuation: At the upper price band of Rs 400, the stock is expected to be valued at a P/E and P/B ratio of around 68 and 8 times, respectively. In comparison, its only listed peer, Linde India, is trading at a P/E of 125.7 times and a P/B of nearly 15 times. Overview: The company, an industrial gas supplier, stands to benefit from rising steel capacity, semiconductor fabs, green hydrogen/ammonia projects that are likely to raise India's gas demand. However, high power costs and operational risks could impact margins and earnings stability. About Ellenbarrie Industrial Gases Founded in 1973, Ellenbarrie makes industrial and medical gases, producing oxygen, nitrogen, argon, CO₂ and speciality mixes at eight plants, anchored by a 1,250-tonne per day oxygen unit. Bulk and packaged gases supplied to steel, pharma, chemicals, and healthcare clients generated 84 per cent of its FY24 revenue. Strengths of Ellenbarrie Industrial Gases Robust distribution network: With one of India’s largest fleets of cryogenic tankers, over 35,000 cylinders, 1,445 dealers and dedicated onsite pipeline plants, Ellenbarrie can deliver gases via pipeline, bulk liquid or cylinders, offering customers flexibility and rapid reach. Sticky customer base: Long-tenor onsite and bulk contracts plus company-owned storage at customer sites drive repeat business. About 92 per cent of FY24 gas revenue came from repeat customers. Weaknesses of Ellenbarrie Industrial Gases Small market share: Ellenbarrie’s revenue share is just 2-3 per cent versus Linde’s 31  per cent and Inox Air&rsquo