TruAlt Bioenergy Limited IPO

26 Sep 2025 , 11:19 AM

Karnataka based TruAlt Bioenergy Limited operates five distillery units that produce ethanol, rectified spirit, extra‑neutral alcohol and a range of downstream bio‑products (including bio‑CNG and sustainable aviation fuel). Through its wholly‑owned subsidiary Leafiniti Bioenergy Pvt. Ltd., TruAlt is also a pioneer in compressed biogas (CBG) production under the Government’s SATAT scheme.  The business is vertically integrated – raw‑material feedstock (molasses, syrup, damaged grains, agricultural residues, etc.) is sourced largely from promoter‑group entities, giving the company a reliable supply base.  With an installed ethanol capacity of roughly 2,000 KLPD (≈ 3.6 % of the Indian market) and a strategic push into second‑generation bio‑fuels, SAF and fuel retail, TruAlt is positioned as one of India’s largest and most diversified bio‑fuel producers.

Offer Details of the IPO

• Total Offer Size –INR 839.3 crore. The IPO comprises a fresh issue of equity shares worth up to INR 750 crore together with an offer for sale of up to INR 89.3 crore.
• The shares being sold by existing shareholders are held by:
• Dhraksayani Sangamesh Nirani (Promoter Group Selling Shareholder) – 9,00,000 shares
• Sangamesh Rudrappa Nirani (Promoter Group Selling Shareholder) – 9,00,000 shares

Price band: INR 472 to INR 496 per Equity Share

Book-Running Lead Managers (BRLMs)

• DAM Capital Advisors Limited
• SBI Capital Markets Limited

Global Bio‑Energy & Bio‑Fuels Industry – Overview

The global bio‑energy & bio‑fuels industry converts renewable biomass into three principal product families – solid bio‑energy, liquid bio‑fuels and biogases – that are used for power generation, transport fuels and industrial heat.  The sector is driven by climate‑policy mandates (e.g., ethanol‑blending targets, the Sustainable Alternative Towards Affordable Transportation/SATAT programme in India, the EU Renewable Energy Directive, and CORSIA for aviation) and by the economics of waste‑to‑fuel conversion (molasses, sugarcane bagasse, agricultural residues, municipal solid waste, and animal waste).

Globally, growth in the overall bio‑fuel market is decelerating. It is expected to expand at ~2.3 % CAGR (2022‑2026) (OECD‑FAO outlook) after a faster 5 % CAGR (2018‑2022). However, India is a key growth engine: ethanol demand alone is projected to grow at 17.7 % CAGR through FY 2026, pushing the country toward the world’s third‑largest ethanol market. For the industry, policy‑driven demand (fuel‑blending mandates, SATAT, CORSIA) is the primary catalyst, while feedstock diversification (molasses, damaged grains, municipal waste) underpins the shift toward 2G bio‑fuels and SAF.The industry remains fragmented (hundreds of distilleries and sugar mills) but is consolidating around integrated players that can combine ethanol production, CBG generation, and downstream SAF – a strategic positioning exemplified by TruAlt Bioenergy.

Table: Key Segments

Key Segment	Core Products / Applications	Past growth (CAGR)	Future growth (CAGR)	Comment
Solid Bio-energy (e.g., bagasse, wood chips, agricultural residues)	Direct-combustion power, district heating, cogeneration	~ 3 % (2019-2023) – modest expansion as utilities replace coal with low-cost bagasse cogeneration	~ 2 % (2024-2026) – growth slows as the most attractive low-cost feedstocks are already deployed; focus shifts to higher-efficiency boilers and carbon-capture retrofits	Still the cheapest renewable heat source in many emerging markets, the segment is largely “fuel-substitution” for coal and natural gas.
Liquid Bio-fuels (first-generation ethanol, biodiesel, blended gasoline/diesel)	Transport fuels (E-blend, B-blend), industrial solvents, feedstock for SAF	5 % (2018-2022) – driven by aggressive ethanol-blending policies in Brazil, the USA and India	2.3 % (2022-2026) – global demand for ethanol and biodiesel is expected to rise at a slower pace as the market matures and the share of fossil fuels declines	The segment remains the backbone of the industry; first-gen ethanol dominates the Indian market (≈ 70 % of total biofuel volume).
Biogases (Compressed Bio-gas (CBG), Bio-CNG, biomethane)	Vehicle fuel (CNG/NG-compatible fleets), power generation, feedstock for green hydrogen	~ 7 % (2019-2023) – rapid uptake under India’s SATAT scheme and the EU’s biomethane incentives	~ 5 % (2024-2026) – continued roll-out of CBG plants, but growth moderated by pipeline constraints and competition from electrification	CBG is the fastest-growing sub-segment in India; it offers a direct substitute for imported CNG and helps meet the government’s 15 % gas-share target by 2030.
Sustainable Aviation Fuel (SAF) (FT-derived from ethanol, FT-syn-fuel, HEFA)	Jet-fuel blend for commercial aviation (CORSIA compliance)	N/A – commercial SAF production only began in 2024 (first 110 klpd plant)	10-12 % (2024-2026) – driven by airline commitments to carbon-neutral growth and rising jet-fuel demand in Asia-Pacific	SAF is still nascent but expected to become a high-margin niche; early-mover advantage for firms with integrated ethanol-to-SAF capability (e.g., TruAlt’s 310 klpd SAF project).
Second-generation (2G) bio-fuels & biochemicals (cellulosic ethanol, lignocellulosic bioplastics, bio-naptha)	High-value chemicals, plastics, advanced fuels, carbon-negative products	N/A – commercial scale only in pilot stage	15-20 % (2024-2026) – strong R&D pipelines, government priority-sector lending, and the need to decouple fuel production from food crops	2G pathways promise superior sustainability (no food-vs-fuel conflict) and higher energy density; they will increasingly complement 1G ethanol as feedstock flexibility improves.

Source: RHP

 

TruAlt Bioenergy Limited – Company Overview

Karnataka based TruAlt Bioenergy Limited was incorporated in 2021 as TruAlt Energy Limited and later changed its name to TruAlt Bioenergy Limited. Over 2022-24, various promoter group businesses in distilleries and related services were transferred to TruAlt. The company’s core business spans the production of ethanol, rectified spirit, and extra‑neutral alcohol (ENA), along with other distillery products. TruAlt Bioenergy also focuses on the generation of compressed biogas (CBG) under India’s SATAT scheme and the development of sustainable aviation fuel (SAF) and other second‑generation bio‑products such as bioplastics and biochemicals.

TruAlt Bioenergy works with key parent group counterparties to support its operations. Nirani Sugars Limited (NSL), Shri Sai Priya Sugars Limited (SPSL), and MRN Cane Power India Limited (MRNCPIL) supply molasses, syrup feedstock, and power. Its subsidiary, Leafiniti Bioenergy Private Limited (acquired Oct 2023), operates a CBG plant and partners with GAIL (India) Ltd for CBG production under SATAT, with GAIL also participating as an equity partner and off-taker.

Competitive Positioning

TruAlt Bioenergy is the largest ethanol producer in India by installed capacity, with approximately 2,000 KLPD, of which around 1,800 KLPD is operational as of FY 2025. The company holds roughly 3.6 % of the national ethanol market, including both sugar‑based and grain‑based production. It operates five distillery units, three of which are currently active, all featuring dual‑feed capability to process molasses, syrup, damaged grains, and maize.

Strengths

• Vertical integration – raw-material supply largely from promoter‑group sugar mills guarantees feedstock availability, price stability, and quality control.
• Bagasse-based captive cogeneration (high‑efficiency boilers & turbines) lowers power costs versus coal-based generation and provides surplus power for sale.
• Diversified product portfolio – ethanol, ENA, CBG, SAF, and bioplastics reduces reliance on a single product line and taps multiple growth markets.
• Early mover in SAF – operating the world’s first commercial ethanol-to-SAF refinery (110 KLPD) and planning a 310 KLPD facility positions TruAlt as a key supplier for the aviation sector’s decarbonisation push.
• OMC authorisation – recognised as a private Oil‑Marketing Company, enables direct retail of blended fuels (E85/E93) and conventional fuels, expanding downstream presence.
• Government incentives – interest subvention, grants under SATAT, and ethanol price support improve project economics and cash-flow resilience.
• Strategic partnerships – joint venture with GAIL for CBG and potential collaborations with research institutes provide access to technology, off-take guarantees, and credibility.

Weaknesses

• Capacity utilisation – utilisation fell to ~ 41 % in FY 2022 due to rapid capacity expansion, resulting in fixed‑cost burden and lower profitability per unit.
• Feedstock concentration – heavy reliance on sugar‑cane molasses makes the company vulnerable to sugar-price volatility and “food‑vs‑fuel” policy shifts, potentially compressing margins.
• Regulatory exposure – ethanol pricing, SAF mandates, and CBG policy are subject to government revisions, creating revenue and margin uncertainty.
• Capital-intensive expansion – large CAPEX for new distilleries, SAF plant, and retail network may cause cash‑flow strain and execution risk.
• Competitive fragmentation – numerous midsized sugar-based ethanol players and price competition from fossil fuels and emerging electric vehicles pressure market share and pricing power.
• Technology transition – SAF and second-generation bio-fuels require advanced R&D and scale-up, with commercial viability not yet proven, posing a risk of delayed returns.

Financial Profile

Asset transfer and capex driven revenue growth: TruAlt Bioenergy’s revenue may not be comparable to peers due to the transfer of distillery assets and significant capacity expansion over the past few years.

Better Profitability: PAT jumped to INR1,466 million in FY 2025 with a 7.5% margin, after a dip in FY 2022‑24 due to integration costs and working-capital pressures. Scale economies, high-margin CBG & CO₂ streams. Operational leverage combined with a cleaner capital structure supports sustainable profitability going forward.

Table: Peers Comparison

Name of the Company	Revenue FY 2025 (INR Million)	EPS Basic	EPS Diluted	NAV (INR per share)	P/E	Market Price (INR)
TruAlt Bioenergy Limited	19,077.24	20.94	20.94	108.87	23.7	496.00*
Balrampur Chini Mills Ltd	54,153.8	21.65	21.57	187.99	23.89	515.35
Triveni Engineering & Industries Ltd	68,079.4	10.88	10.88	144.34	33.07	359.75
Dalmia Bharat Sugar & Industries Ltd	37,457.8	47.78	47.78	399.62	7.75	370.45

Source: RHP; * – upper end of price band