The Pune company betting ₹1,000 crore that the world runs out of balloon gas

The Pune company betting ₹1,000 crore that the world runs out of balloon gas

In today's edition, we look at AirLife Gases — a seven-year-old Pune company that raised ₹143 crore in five months at a ₹958 crore valuation, and asks you to believe that a business selling an inert gas can grow revenue 6x in four years.

Every time you slide into an MRI machine, roughly 1,700 litres of liquid helium is sitting inches from your body, keeping a superconducting magnet at minus 269°C.

Every time a semiconductor wafer gets etched in a fab, helium is flowing through the chamber to carry away heat.

Every time an optical fibre is drawn — the stuff that carries your Netflix stream — helium is cooling the glass as it stretches.

And every single molecule of that helium in India is imported. All of it. India produces essentially zero commercial helium.

Now hold that thought.

Because in 2019, a man named Kiran Karnawat, who had spent 15 years inside the Indian industrial gas business, looked at that dependency and decided to build a company around it. That company is AirLife Gases Private Limited. And over the last year, it has quietly raised money from people like Ashish Kacholia and Nuvama's Shiv Sehgal at a valuation of ₹900 per share.

So what exactly is it selling? And is ₹958 crore a sensible price?

Let's break it down.

This is the part most people get wrong.

Helium is the second most abundant element in the universe. On Earth, it's absurdly scarce. It's so light that once it escapes into the atmosphere, it drifts off into space and is gone forever. You cannot manufacture it. You can only dig it up.

And you can only dig it up in a handful of places.

Helium forms underground from the radioactive decay of uranium and thorium over hundreds of millions of years. It gets trapped in the same geological formations that trap natural gas. But most natural gas fields contain helium in concentrations of 0.01% — far too dilute to bother extracting.

You need concentrations of roughly 0.3% or more for the economics to work. That geology exists in maybe five or six places on the planet: parts of Texas, Oklahoma and Kansas in the US; Qatar's Ras Laffan; Algeria; Russia's Amur field; and pockets of Saskatchewan and Alberta in Canada.

That's it. That's the whole world's helium supply.

Which means helium is a byproduct business. Nobody drills for helium. They drill for natural gas or LNG, and helium is the thing they strip out along the way. And that creates a strange dynamic: helium supply is decided by decisions made in the LNG business, not the helium business. If an LNG plant goes down for maintenance, global helium supply tightens. If Qatar expands LNG, helium loosens.

Five companies — Linde, Air Liquide, Air Products, Taiyo Nippon Sanso and Iwatani — control roughly 80% of the world's helium.

Now you can see the gap AirLife walked into.

AirLife's core insight is deceptively simple.

Most Indian buyers of helium don't buy from the source. They buy from traders, who buy from other traders, who buy from the majors. Each layer takes a cut. And when there's a global shortage — which happens roughly every four years — the traders simply stop answering the phone, because they'd rather serve their bigger customers elsewhere.

AirLife's pitch is: cut out the layers.

The company says it has direct molecule sourcing agreements with actual producers in the US, Canada and Qatar — long-term contracts, some running up to ten years, covering roughly 70–80 million cubic feet a year. Not a trading relationship. A supply relationship.

But here's the thing. Securing the molecule is only half the problem. The other half is moving it.

Liquid helium has to be transported at minus 269°C in specialised cryogenic vessels. If it warms up, it boils off and you lose your cargo. These containers are expensive, in short supply globally, and typically owned by — you guessed it — the same five majors.

So AirLife bought its own fleet. 40-foot ISO containers, 20-foot T75 containers, superinsulated dewars, tube trailers, quads. It runs a transfill facility in Chakan near Pune, and a logistics facility in Macungie, Pennsylvania.

That gives it five revenue streams:

1. Bulk helium supply — liquid and gaseous, the core business

2. ISO container leasing — renting out its fleet to other players

3. Electronics & specialty gases — ultra-pure gases for semiconductors, solar, LED, PCB

4. Cylinders, quads and tube trailers — smaller-volume gaseous distribution

5. Superinsulated dewars — cryogenic vessels for MRI, NMR, research labs

Notice what this actually is. It's not a manufacturing business. It's a sourcing-plus-logistics arbitrage. AirLife makes money on the spread between what it pays a producer in Texas and what a hospital in Chennai or a fab in Gujarat pays it — minus the cost of getting the molecule across an ocean without letting it boil away.

That's a real business. But it's a spread business. And spread businesses have a specific vulnerability that we'll come to shortly.

Helium's applications are almost comically diverse. Balloons are the least of it.

• Medical imaging — MRI and NMR machines. Globally this is the single largest end-use, around 40% of demand. Every MRI needs liquid helium, and India is installing them fast.

• Semiconductors — cooling, purging, ion implantation, chemical vapour deposition. Helium is inert and has the highest thermal conductivity of any noble gas.

• Optical fibre — helium cools the glass during fibre drawing. More 5G and data centres, more fibre, more helium.

• Aerospace & defence — rocket propellant tank pressurisation. Every launch vents helium.

• Lab-grown diamonds — used in confinement and synthesis. Surat's LGD boom is a real Indian demand pocket.

• Laser cutting & welding — assist gas for precision metalwork.

• Leak detection — helium's tiny atoms escape through the smallest defects, making it the gold standard for pressure testing.

• Deep-sea diving — heliox breathing mixtures.

• Pharma & diagnostics — carrier gas in GC-MS instruments.

The common thread: in almost every one of these applications, there is no substitute. You cannot swap helium for something cheaper. If you need it, you pay whatever it costs.

Which is why helium prices have compounded at roughly 8% a year for two decades, reaching around $375 per thousand cubic feet — about 100 times the price of natural gas.

Here's where it gets interesting.

India's helium market is small in absolute terms but structurally attractive, because everyone is fighting over an imported commodity with no domestic supply.

The field splits into three buckets.

The global majors' Indian arms — Linde India, Inox Air Products (the JV with Air Products), Taiyo Nippon Sanso India, Air Liquide India. These are the heavyweights, plugged directly into parent-company molecule allocations.

Regional distributors — Global Gases, Gulf Cryo and similar Gulf-linked players who buy in bulk and redistribute into Asia.

A long tail of small importers, clearing shipments through Mumbai and Chennai ports and reselling into local industrial demand.

AirLife sits in an odd spot. It's not a major, but it isn't a trader either — it claims direct producer contracts, which is the thing traders don't have. For a company that didn't exist eight years ago, being a credible independent supplier in a market dominated by century-old multinationals is genuinely notable.

But there's an obvious catch. Linde, Air Products and Taiyo Nippon Sanso aren't helium companies. They're diversified industrial gas giants for whom helium is one line item among dozens. Linde India alone does over ₹2,500 crore of total revenue. If helium becomes strategically important to them, they can subsidise it, price aggressively, or simply choose not to sell AirLife the molecule.

AirLife's entire advantage rests on having sourcing relationships that the majors can't easily sever. That's a moat made of contracts, not concrete.

Which — and this is the most important development in this whole story — is exactly why AirLife stopped being a distributor.

In October 2025, AirLife announced it was participating in a financing round for Keranic Industrial Gas, tied to a combination with Canada's Royal Helium.

By November 2025, it had closed the acquisition of about 52.9% of Royal Helium Ltd. — an exploration and production company with helium permits and leases across southern Saskatchewan and southeastern Alberta.

Then in July 2026, it signed a definitive agreement to acquire a controlling stake in GNG, a US-based helium gathering, processing and liquefaction infrastructure company.

Read that sequence again.

In under a year, AirLife went from "we buy helium from producers" to "we own the reservoir, the gathering system, the processing plant, the liquefier, the containers and the last-mile delivery."

Karnawat's own framing: the company is "evolving from a global distributor to an integrated helium producer."

This is a completely different company from the one described in the September 2025 fundraise documents. And it changes the risk profile entirely — from a working-capital-heavy trading business to a capital-intensive upstream resource business, with all the exploration risk, recommissioning risk and geological risk that comes with it.

Upside: if it works, AirLife owns the molecule instead of renting access to it. Downside: exploration companies fail all the time, and helium E&P in Saskatchewan is not a business Indian public market investors have any framework for pricing.

Kiran Indrabhan Karnawat — Founder, Chairman and CEO. A mechanical engineering graduate from University of Pune. Before AirLife, he built K-Air Specialty Gases into one of India's top five industrial gas companies, and in 2010 took it into a joint venture with Matheson Inc. (now part of Nippon Sanso, the world's fifth-largest industrial gas group) as Managing Director.

That background matters more than it might seem. Helium sourcing is a relationship business. The producers who control supply don't sell to strangers. Karnawat had two decades of those relationships before he started.

The board also includes Rupali Karnawat (his wife) and Rajaram Mahadev Tembare, both directors.

Ownership is heavily concentrated. As of the June 2025 valuation, Karnawat personally held 84,49,900 of 91,09,118 shares — about 93%. Even after all the 2025 dilution, the promoter family holds roughly 85%.

That's founder-led conviction. It's also single-point-of-failure risk. Strip out Karnawat and you strip out the sourcing relationships that constitute the moat.

Here's the actual reported track record (₹ crore):

Two things jump off that table.

One. Look at FY23 to FY24. Revenue went up 22%. EBITDA went down 60%. Profit went down 65%. Operating margin fell from 26.4% to 8.6%.

Why? Because in FY22–23 there was a global helium shortage. A major Russian source went offline after a fire. Prices spiked. AirLife, holding contracted supply, made a killing — 26% operating margins on what is fundamentally a distribution business.

Then Russia's Amur facility came back online in October 2023. US sanctions redirected Russian helium away from the West and into Asia. Asian markets got flooded. Prices softened. And AirLife's margin collapsed by two-thirds.

Two — and this is the one that matters. FY25 revenue fell 3%, from ₹188 crore to ₹183 crore.

Yes, profitability recovered — EBITDA up 21%, PAT up 28% to ₹12.5 crore, margins clawing back to 10.9%. That's a real operational improvement. But the top line went backwards. Three years in, revenue has essentially plateaued in the ₹180–190 crore band.

That's the spread business showing its face. AirLife doesn't control the price of what it buys or sells. It captures the gap. In a shortage the gap is enormous. In a glut it's thin.

This isn't a criticism of management — they've navigated it. It's a description of the business model. Anyone underwriting AirLife is, whether they realise it or not, taking a view on the helium cycle.

Now here's the part that deserves scrutiny.

The valuation used to price the fundraise projects:

FY26 revenue of ₹412 crore. Against FY25 actual of ₹183 crore. That's a 125% jump in one year — off a base that just shrank 3%.

And it gets worse. Q1 FY26 — the quarter ending June 2025, the actual provisional number sitting inside the valuation report itself — came in at ₹32.5 crore of revenue and ₹0.63 crore of profit.

Annualise that and you get roughly ₹130 crore. To hit ₹412 crore, the remaining nine months would have to deliver ₹380 crore. That's not growth. That's a step-change requiring the US transfill, the new facilities and the large bulk orders to all land more or less simultaneously.

Management's justification, per the report, rests on three things: a secured bulk liquid helium order from a Chinese customer, an ONGC tender awarded for roughly 50% of their helium requirement, and new transfill facilities coming online in the US and Europe.

Those may well happen. But there's a wide gap between a signed intention and a booked rupee, and the valuation capitalises the intention.

AirLife raised money four times between April and September 2025 — every single time at ₹900 per share (₹10 face value plus ₹890 premium):

Roughly ₹143.5 crore in under five months, across 80-plus non-promoter allottees.

The September 3rd round is the one that raises eyebrows in the right way. Among the 16 allottees: Ashish Kacholia (₹15 crore — by far the largest single cheque), Shiv Sehgal, Neo Alternatives Investment Trust, Neo Markets Services, and Gold Circle Venture Partners. That's recognisable smart money in the Indian small-cap ecosystem.

The September 11th round widened it out to 65 allottees — mostly HNIs and family offices, cheque sizes from ₹25 lakh to ₹6.5 crore.

Post all of this, share count stands at 1,06,44,438. At ₹900, that's a valuation of roughly ₹958 crore.

Two registered valuers, two different years, two wildly different methods, one suspiciously similar answer.

Valuation 1 — Sudha Bhushan, as on 30 Sept 2024: DCF, WACC of 30.27%, terminal growth 5%. Answer: ₹888.34 per share. Equity value ₹804 crore.

Valuation 2 — Procurve Valux, as on 30 June 2025: DCF, WACC of 18.68%, terminal growth 2%. Answer: ₹899.99 per share. Equity value ₹820 crore.

Notice what happened. The second valuer cut the discount rate by nearly 12 percentage points — a change that would normally send value soaring — and simultaneously cut terminal growth from 5% to 2%, which pushes value down. The two moves roughly cancel. And the answer lands within ₹12 of the previous one.

Maybe that's genuine convergence. Maybe it's a number that was known before the model was built. You can decide.

A few more things worth knowing about that second valuation:

• The cost of equity is 30.7%, built by adding a 15% "company specific risk premium" on top of CAPM. The valuer is explicitly saying: this is a very risky business. Fair. But that 30.7% then gets blended with cheap debt down to an 18.68% WACC.

• 61% of the entire enterprise value comes from the terminal value — the assumed cash flows after FY30, discounted back. Only 39% comes from the five years of explicit forecast. Most of what you're buying exists beyond the forecast horizon.

• Net worth as of 30 June 2025 was ₹74.82 crore. The valuation is ₹820 crore. That's roughly 11x book.

• FY25 EPS was ₹13.81. The shares were issued at ₹900. That's a price-to-earnings ratio of roughly 65x. On the post-money ₹958 crore against FY25 PAT of ₹12.5 crore, it's closer to 77x.

• EBITDA for FY25 was ₹19.6 crore. Enterprise value at the issue price is somewhere north of ₹900 crore. That's an EV/EBITDA in the mid-40s.

For context, Linde India commands a very high multiple too — but Linde India is a ₹2,500-crore-plus revenue business with hundreds of crores of profit and decades of operating history behind it. AirLife is asking for a comparable multiple on a business a fraction of that size, with a five-year track record, a top line that just declined, and an operating margin that swung from 26% to 9% to 11% in three years.

The company has said it's targeting an IPO in the next 24–36 months and is currently onboarding anchor investors.

Here's the honest version.

The thesis is genuinely good. Helium is a non-substitutable, geologically constrained, structurally short commodity. India imports 100% of it. Demand is being driven by things that aren't going away — MRI installations, semiconductor fabs, optical fibre, space launches, lab-grown diamonds. An Indian company with direct producer relationships and its own container fleet is solving a real problem, and the recent moves into upstream production and liquefaction infrastructure address the single biggest weakness in the original model.

The execution risk is enormous. The FY26 projection implies a doubling that the first quarter's actuals don't support. The business is a spread business dependent on a commodity cycle it doesn't control. Ownership and know-how are concentrated in one person. And the company has, in the space of a year, pivoted from asset-light distribution to capital-intensive resource ownership — a transition that has broken far larger companies.

The valuation prices the thesis, not the track record. At roughly 65x FY25 earnings, 11x book, with revenue that declined last year and 61% of value sitting in a terminal assumption beyond FY30 — there is very little margin for the projections to disappoint.

For the smart money that came in at ₹900 — Kacholia, Sehgal and the rest — that may be a perfectly reasonable venture-style bet on a structural shortage. They can size positions accordingly and wait.

For anyone looking at the unlisted market and seeing "helium play, IPO in 2 years," the question worth sitting with is simpler: what happens to this valuation if helium prices soften for eighteen months?

We know the answer. It happened in FY24. Profit fell 65% while revenue grew.

Until next time.

This is a summary and analysis of publicly filed documents and company announcements. It is not investment advice, and nothing here is a recommendation to buy or sell any security — least of all an unlisted one, where price discovery is thin and exit options are limited. Do your own work.

Sources: Board resolutions and Form PAS-3 allottee lists of Airlife Gases Private Limited (allotments dated 3 and 11 September 2025); Valuation Report by Sudha Bhushan, Registered Valuer (IBBI/RV/07/2019/12234), as on 30 September 2024; Valuation Analysis by Procurve Valux Private Limited (IBBI/RV-E/02/2025/218), as on 30 June 2025; company press releases dated October 2025, November 2025 and July 2026; industry data from Grand View Research and unlisted-market research platforms