Ellenbarrie – An Established Player in Industrial Gases

24 Jun 2025 , 09:55 AM

Ellenbarrie is a leading producer of Industrial Gases in India. It is one of the oldest Indian companies that supplies a wide range of industrial and medical gases. While it is a market leader in East and South India, it has a pan-India presence. In addition to supplying industrial gases, it offers a diverse range of turnkey solutions. Its services include project engineering for Air Separation Units, turnkey solutions for medical gas pipelines and provision of medical equipment to hospitals.

Distribution is critical in its business and is one of the strengths of Ellenbarrie. It possesses a pan-India distribution network that includes multiple delivery modes – pipelines (onsite), bulk (cryogenic tankers) and packaged (cylinders).

The company is doing an IPO to reduce its debt and fund capex.

Offer Details of the IPO

The Initial Public Offer (IPO) of Ellenbarrie Industrial Gases Limited consists of

• Fresh Issue of up to INR 4,000.00 million
• Offer for Sale of up to 11,313,130 Equity Shares of face value of INR 2 each, aggregating up to INR 4525 million.

• The promoters/founders selling shares in the Offer for Sale are Padam Kumar Agarwala and Varun Agarwal, who are offering up to 5,656,565 Equity Shares each

• Price Band and Offer Size: The company has fixed the price band of the issue at ₹380 to ₹400 per share
• BRLMs: The BRLMs of the issue are Motilal Oswal Investment Advisors Limited, IIFL Capital Services Limited (formerly known as IIFL Securities Limited), and JM Financial Limited.

Objectives of the IPO:

The IPO objectives are to raise funds for repayment of debt, setting up a new air separation unit, and general corporate purposes. The details of the objectives are as follows:

De-leveraging/Repayment of Debt

Repayment/prepayment, in full or in part, of certain outstanding borrowings availed by the company: INR 2,100.00 million

Capital Expenditures:

Setting up of an air separation unit at the company’s Uluberia-II plant with a capacity of 220 TPD: INR 1,045.00 million

An Overview of Industrial Gases Industry

The industrial gases industry dates back to the late 18th century, when Antoine Lavoisier and Joseph Priestley began experiments that led to the discovery of oxygen and other gases. However, it wasn’t until the late 19th and early 20th centuries that the industry, with firms such as Linde and Air Liquide, started to capitalise on the breakthroughs.

Evolution of the Industry

The industrial gases industry has changed considerably over time, due to technology developments, changes in customer requirements, and the introduction of new applications. The industry has expanded from its traditional base in steel and chemicals to serve a wide range of sectors, including healthcare, food and beverage, and electronics.

Key End Customers

The industrial gases industry caters to a broad array of customers, including:

• Steel and metals: The steel industry, metal workers, and foundries depend on industrial gases like oxygen, nitrogen, and argon for processes such as steel production, including the cutting and welding of steel.
• Chemicals and petrochemicals: Producers of chemicals use industrial gases for synthesis, inerting, and blanketing among other processes.
• Healthcare: Hospitals, clinics, and medical research facilities depend on medical-grade gases like oxygen, nitrous oxide, and carbon dioxide for patient care and research.
• Food and beverages: Food processing and manufacturing plants employ industrial gases, such as nitrogen, oxygen, and carbon dioxide, for packaging, freezing, and carbonation.
• Electronics: Electronics manufacturers use high-purity gases like nitrogen, argon, and hydrogen for various applications, including semiconductor production and assembly.

Market Segments

The industrial gases market is divided into the following types:

• Merchant market: The market in which industrial gases are sold in the form of cylinders, dewars, or other containers to customers needing small quantities of gas.
• Bulk market: This market is comprised of the sale of industrial gases in bulk quantities to customers with needs for large volumes of gas.
• On-site market: This market relates to the production and delivery of industrial gases directly at customers’ sites, often through pipelines or on-site generators.

Other Important Details

• Global presence: The industrial gases market is a global one, with players serving more than one region or country.
• Regulatory regime: The industry operates under rules and regulations for safety, environmental protection, product quality, and other aspects that govern the relationship in this industry.
• Technological changes: Technological developments, such as new gas production and separation technologies, are leading to the increasing use of digital technologies to enhance efficiency and customer service.

 

Market Size And Growth

The industrial gases market in India is an established and moderately fast growing sector, with a market size of USD 1.31 billion in 2024. The market has grown at a CAGR of 6.3% during 2018-24, driven by rapid industrialization and infrastructure development, a growing emphasis on hydrogen as a clean energy source, and innovations in gas production, storage, and distribution that enhance efficiency and reduce costs.

Segmentation by Product

The market can be segmented into six key product categories: oxygen, hydrogen, nitrogen, carbon dioxide, argon, and others. The size and growth of each subsegment are as follows:

• Oxygen: The demand for oxygen was around 2.3 million tons in 2024, with a market size of USD 0.47 billion. The market is expected to grow at a CAGR of 7.1% to reach USD 0.62 billion by 2028.
• Nitrogen: The demand for nitrogen was around 4.7 million tons in 2024, with a market size of USD 0.31 billion. The market is expected to grow at a CAGR of 6.1% to reach USD 0.39 billion by 2028.
• Hydrogen: The demand for hydrogen was around 0.16 million tons in 2024, with a market size of USD 0.22 billion. The market is expected to grow at a CAGR of 10.1% to reach USD 0.32 billion by 2028.
• Carbon Dioxide: The demand for carbon dioxide was around 4.2 million tons in 2024, with a market size of USD 0.14 billion. The market is expected to grow at a CAGR of 6.7% to reach USD 0.18 billion by 2028.
• Argon: The demand for argon was around 0.22 million tons in 2024, with a market size of USD 0.14 billion. The market is expected to grow at a CAGR of 9.0% to reach USD 0.19 billion by 2028.

Key Driving Factors

The growth of the industrial gases market in India is driven by several key factors, including:

• Rapid Industrialization and Infrastructure Development: The Indian government’s focus on rapid industrialization and infrastructure development has led to an increase in demand for industrial gases.
• Growing Emphasis on Hydrogen as a Clean Energy Source: The Indian government’s emphasis on hydrogen as a clean energy source has led to an increase in demand for hydrogen.
• Innovations in Gas Production, Storage, and Distribution: Innovations in gas production, storage, and distribution have enhanced efficiency and reduced costs, leading to an increase in demand for industrial gases.
• Government Policies and Initiatives: Government policies and initiatives, such as the Production Linked Incentives (PLI) scheme, have encouraged the growth of the industrial gases market in India.
• Growing Demand from End-Use Industries: The growth of end-use industries, such as steel, chemicals, and pharmaceuticals, has led to an increase in demand for industrial gases.

 

An Overview of Ellenbarrie Industrial Gases Limited

Ellenbarrie Industrial Gases Limited (EIGL) is one of the oldest operating industrial gas companies in India, with a history spanning more than 50 years. The company was originally incorporated by the RoC as Ellenbarrie Industrial Gases Limited on November 23, 1973.

Business Segments

EIGL conducts its business in two primary segments: Industrial Gases and Project Engineering Services.

Industrial Gases

The Company’s principal line of business is the Industrial Gases segment, which contributed around 93.59% of the total revenue from operations during Fiscal 2025. The company produces and offers industrial gases, such as oxygen, nitrogen, argon, helium, hydrogen, liquid carbon dioxide, nitrous oxide and acetylene via its air separation units and vacuum pressure swing absorption plants.

Project Engineering Services

Project Engineering Services contributed about 6.41% to the total revenue from operations in Fiscal 2025. The company offers project engineering services comprising of design, engineering, supply, installation and commissioning of tonnage ASUs and other projects serving customers in different industries on a turnkey basis.

Products and Services

EIGL provides following types of products and services, among others:

• Industrial gases including oxygen, nitrogen, argon, helium, hydrogen, carbon dioxide, nitrous oxide, and acetylene
• Project engineering services including design, engineering, supply, erection and commissioning of tonnage ASUs in addition to related projects
• Medical gases such as medical oxygen, medical nitrogen, medical cryogenic cylinders and cryogenic tankers
• Special gases like high purity nitrogen, zero air & welding mixtures
• Dry ice, fire fighting gases, LPG (Propane) & Medical, Natural, Synthetic Air, Welding Solutions ) and other special gases.

They also offer complete solutions in medical gas pipeline systems from design to installation, passing through commissioning, testing and system validation, according to quality and safety standards.

Manufacturing Facilities

EIGL has a network of nine facilities in East, South and Central India, including three standalone ASUs, two standalone cylinder filling stations and four satellite facilities at its customer sites. The company has a large number of cryogenic transport tankers in operation in India that enable the company to transport them from its plants to many parts of the country in temperature-controlled mode.

Competitive Landscape

Major Competitors

The industrial gases market in India is highly competitive, with several major players vying for market share. The major competitors in this space include:

• Linde India Ltd.
• Inox Air Products Pvt. Ltd.
• Air Water India Pvt. Ltd.
• Air Liquide India Holding Pvt. Ltd.
• Ellenbarrie Industrial Gases Ltd.

Competitor Analysis

• Linde India Ltd.: Linde India is a market leader in the industrial gases business in India, with a strong presence in the chemicals, electronics, construction, food and beverage, healthcare, steel and other metal manufacturing, oil & gas, metal fabrication, etc. industries.
• Inox Air Products Pvt. Ltd.: Inox Air Products is the 2nd highest market share holder in India, with a strong presence in the chemicals, automotive, food & beverages, aerospace, oil & gas, metal fabrication, etc. industries. Ellenbarrie Industrial Gases Ltd. has a lower EBITDA margin compared to Inox Air Products.
• Air Water India Pvt. Ltd.: Air Water India is one of the top 3 players in India, with a strong presence in the steel, healthcare, electronics, chemicals, automotive, oil & gas, metal fabrication, etc. industries. Ellenbarrie Industrial Gases Ltd. has a lower revenue CAGR compared to Air Water India.
• Air Liquide India Holding Pvt. Ltd.: Air Liquide India is a leading player in the industrial gases business in India, with a strong presence in the chemicals, electronics, construction, food and beverage, healthcare, steel and other metal manufacturing, oil & gas, metal fabrication, etc. industries. Ellenbarrie Industrial Gases Ltd. has a lower PAT margin compared to Air Liquide India.
• Ellenbarrie Industrial Gases Ltd.: Ellenbarrie Industrial Gases Ltd. is one of the important manufacturers of industrial gases in East India and South India, and the market leader in the states of West Bengal, Andhra Pradesh, and Telangana, each in terms of installed manufacturing capacity. The company has a strong presence in the steel, pharmaceuticals and chemicals, healthcare, engineering and infrastructure, railways, aviation, aerospace and space, petrochemicals, defence, semi-conductors, etc. industries.

Strengths & Risks

Strengths

• The company has a long operating history, having commenced its operations in 1973. It is one of the oldest operating industrial gases companies in India, with a rich legacy of over 50 years.
• The company has a diversified customer base, with a mix of private and government customers.
• It has a diversified product portfolio, enabling it to generate revenues across end-use segments.

Risks

• The company is heavily dependent on the availability of electricity, fuel, and water, which can be affected by shortages or disruptions.
• The company’s business is subject to risks associated with transportation of industrial gases, including accidents and damage to tankers and cylinders.
• The company’s financial performance may be impacted by fluctuations in energy prices, which can affect its production costs and profitability.
• The company’s expansion plans may be affected by unforeseen delays or cost overruns, which can impact its capital expenditure and financial performance.
• The company has higher customer concentration.

Financial Performance

The company’s financial performance has been impacted by various factors, including changes in the market demand for industrial gases, fluctuations in energy prices, and the company’s expansion plans. The company’s revenue from operations has increased over the years, driven by growth in demand for industrial gases and the company’s expansion plans. However, the company’s profit before tax has been impacted by various expenses, including finance costs, depreciation and amortization expense, and other expenses. The company’s cash flow from operating activities has been impacted by various factors, including changes in working capital and the company’s expansion plans.

Revenue Growth: A Steady Climb

Revenue from operations has been growing steadily, with a 31.38% increase in Fiscal 2024 compared to Fiscal 2023, and a 15.96% increase in Fiscal 2025 compared to Fiscal 2024. This growth can be attributed to the company’s expansion plans, which have enabled it to increase its production capacity and cater to growing demand from various industries.

Profit Growth: A Robust Growth

The company’s profits have also seen a significant leap, with a 60.93% increase in Fiscal 2024 compared to Fiscal 2023, and a 83.91% increase in Fiscal 2025 compared to Fiscal 2024. This growth in profits can be attributed to the company’s ability to maintain its pricing power, despite increasing costs, and its focus on cost optimization.

Figure: Financial Summary

INR millions	Period Ending March 31, 2023	Period Ending March 31, 2024	Period Ending March 31, 2025
Revenue from Operations	2051.07	2694.75	3124.83
EBITDA	335.9	615.3	1097.36
Profit After Tax (PAT)	281.42	452.89	832.89
Diluted EPS (INR)	2.15	3.46	6.36
P/E @ 380			59.75
P/E @ 400			62.89

Source: RHP