Trualt Bioenergy, a leading Indian biofuel producer specializing in ethanol with a capacity of 2,000 KLPD (the largest in India), successfully concluded its IPO of Rs 839 crore on September 29, 2025.
The issue, priced at Rs 472–496 per share, was 14 times oversubscribed, driven by strong demand of 45.4x from non-institutional investors (NIIs).
The grey market premium (GMP) stood at Rs 109 at the close of the final day, implying an expected listing price of around Rs 605, a 22% premium over the upper limit of Rs 496.
This GMP reflects strong pre-listing sentiment in the unlisted market, indicating high investor confidence ahead of the listing on the NSE and BSE on October 3, 2025. Impact of the Securities Management Plan (GMP)
The GMP has several immediate and broader implications:
It indicates potential near-term listing gains of 19-22% for allottees, making it attractive to retailers and high net worth individuals (HNIs).
With a retail subscription of 5.8x and a net interest margin (NIM) of 45.4x, the GMP underscores the disproportionate demand from non-retail segments, which could lead to a “lottery” effect where only a fraction of applicants obtain shares. This could boost participation in future renewable energy IPOs.
A strong GMP enhances Trualt’s visibility and credibility in the market, facilitating access to capital post-IPO. The new Rs 750 million raise (out of a total Rs 839 million, including Rs 89 million from OFS) will fund Rs 151 million for multi-feed ethanol operations and Rs 425 million for working capital and general purposes, directly supporting capacity expansion amid the ethanol blending push in India. The promoter stake falls slightly to 70.55%, maintaining control with minimal dilution.
The 22% GMP underscores investor interest in sustainable energy, in line with government targets for a 20% ethanol blend by 2025. It could drive similar valuations in the biofuels sector, although it amplifies volatility in a niche market sensitive to policy changes.
With the allotment finalized today (September 30, 2025), the high oversubscription (QIBs at 5.3x) implies a pro rata distribution, particularly severe for NIIs. Redemptions begin tomorrow (October 1).
A premium debut driven by the GMP could generate initial share price increases, but profit-taking could limit gains if broader markets weaken; historical biofuel IPOs, such as Bhandari Sponge (2023), priced at premiums of 10-15% before the correction.
The premium validates the issue price but exposes the stock to close scrutiny. Strong EBITDA/PAT CAGRs (72%/103% in FY22-FY25) support sustainability; however, the implications include higher execution expectations. Delays in the commissioning of the Vadodara unit (started in July 2025) or raw material volatility could erode post-IPO momentum.
The hype surrounding good manufacturing practices (GMP) masks sector vulnerabilities, such as policy dependence (e.g., ethanol price revisions) and competition from larger players. Analysts point to the need for innovation to mitigate these vulnerabilities, and SBI Securities considers a PE of 29x to be fair, but not undervalued.
The Rs 109 GMP crowns Trualt Bioenergy’s IPO as a resounding success, with a projected 22% increase in share price, consolidating its position in India’s burgeoning biofuels market.
For investors, this gives the green light to short-term investments, although long-term investors should keep an eye on the execution given the favorable policy environment.
Overall, this debut reinforces the attractiveness of the bioenergy IPO, with the potential to attract over Rs 5 billion in investments from the sector by 2026; however, success depends on the management of feedstock risks and blending mandates. Analysts unanimously recommend subscription due to its growth trajectory, positioning Trualt as a benchmark in biofuels.
