India's largest industrial gas company is coming to the market, and our back-of-envelope maths puts a fair price band around ₹1,050–1,100 per share. That would value it at roughly ₹55,000 crore, about 60x last year's earnings.
Here's the fun part. The company's main raw material is air. Free, unlimited, all around you.
So how does a business that sells air make ₹914 crore of profit in a year? And should a company like that really trade at 60x earnings? Let's break it down.
It started in 1963 as Industrial Oxygen Company, with one plant in Pune making compressed oxygen. The Jain family, the same family behind the INOX Group, grew it city by city.
The big turn came in 1999. America's Air Products and Chemicals, one of the world's three largest industrial gas companies, bought 50% through its unit Prodair Corporation. The company was renamed INOX Air Products. Fun fact: it was briefly listed on regional stock exchanges, and was delisted around 1999–2000.
Today it is a near-perfect 50:50 joint venture. Prodair owns 49.74%, and Jain family entities own almost all of the rest. Siddharth Jain runs it as Managing Director.
The scale today:
57 operating locations across 15 states and one union territory
739 cryogenic tankers, India's largest fleet, which drove 39 million km last year
About 1,800 employees and 3,000+ customers
₹3,034 crore of revenue in FY26 (April 2025 – March 2026)
By revenue, it is India's largest industrial gas company, ahead of Linde India.
Air is 78% nitrogen, 21% oxygen and 1% argon. A plant called an air separation unit chills air to about −180°C until it turns liquid, then separates these gases. The air is free. The electricity is not. Power alone eats about 22% of INOX's revenue.
Who buys? Steel mills need oxygen to make steel. Hospitals need medical oxygen. Pharma and glass makers need nitrogen. Solar and chip factories need ultra-pure gases. Steel, healthcare/pharma and auto together make up 57% of revenue.
The interesting part is not what INOX sells. It's how it delivers. There are three ways:
Way of supply | Share of FY26 revenue | How it works | Contract |
|---|---|---|---|
| Merchant (bulk liquid) | 58.6% | Liquid gas trucked to a storage tank INOX owns at the customer's site | Mix of contracts and purchase orders |
| On-site | 28.7% | INOX builds and runs a plant inside the customer's factory and pipes gas in | 15–20 years, take-or-pay |
| Packaged & specialty | 12.8% | Gas in cylinders, plus ultra-pure gases for electronics | Purchase orders |
On-site is the steady part. Picture a giant steel plant. INOX builds an air separation unit on the steel mill's land, owns it, runs it, and sends gas through a pipe. The customer supplies the power for free. The contract runs 15–20 years and is "take-or-pay": the customer pays for a minimum quantity even if it doesn't use it. That's close to a utility.
Merchant is the profit engine. INOX makes liquid gas at 28 plants and delivers it to 1,679 tanks it owns at customers' premises. Liquid gas can only travel about 300 km economically. So whoever has the most plants and trucks nearby wins. And once INOX's tank sits in your factory, switching suppliers is a headache.
Here's the clever bit. Big on-site plants often make more gas than the steel mill needs. INOX has the exclusive right to buy that surplus and sell it through its merchant network. The steel mill has effectively helped pay for capacity that feeds INOX's tankers.
Packaged and specialty is the future bet. Cylinders for hospitals and small users, plus ultra-high-purity gases for solar cell and semiconductor plants. It's the smallest piece today but the highest-value one.
The draft red herring prospectus (DRHP) was filed on September 30, 2026. The lead managers are Kotak, Citi, ICICI Securities and J.P. Morgan.
The most important line in it: this is a 100% offer for sale (OFS). No new shares are issued. Existing owners sell up to 7.72 crore shares, and every rupee goes to them, not to the company.
Who's selling? Look closely and it's perfectly balanced:
Seller | Side | Shares offered | Their average cost per share |
|---|---|---|---|
| Prodair Corporation | Air Products | 3,85,78,328 | ₹7.49 |
| Siddhomal Air Products | Jain family | 1,46,73,000 | ₹0.06 |
| INOX Chemicals LLP | Jain family | 1,17,65,280 | ₹0.64 |
| Siddho Mal Trading LLP | Jain family | 1,16,49,450 | ₹0.26 |
| Sitashri Trading and Finance | Jain family | 4,90,605 | ₹3.22 |
Air Products sells 3,85,78,328 shares. The Jain side sells 3,85,78,335 shares. A difference of seven shares. Both partners keep their 50:50 balance, with each side ending up near 42%.
Why sell at all? The company doesn't need cash: it already holds about ₹850 crore of net cash. The more likely reasons are giving the owners an exit route, putting a market price on a 60-year-old business, and creating listed shares that can be used later.
One thing to remember: after the IPO, public shareholding will be only about 16%. SEBI rules require listed companies to reach 25% public holding over time. So expect the promoters to sell more shares in the years after listing. That supply can weigh on the share price.
INOX grows steadily, earns fat margins, and spends almost everything it makes on new plants. All figures are restated consolidated numbers from the DRHP, in ₹ crore.
FY24 | FY25 | FY26 | |
|---|---|---|---|
| Revenue from operations | 2,590 | 2,790 | 3,034 |
| Revenue growth | 18.2% | 7.7% | 8.8% |
| Operating EBITDA (excl. other income) | 1,146 | 1,259 | 1,421 |
| Operating EBITDA margin | 44.3% | 45.1% | 46.8% |
| Other income | 184 | 259 | 179 |
| Depreciation | 231 | 264 | 346 |
| Profit after tax | 766 | 881 | 914 |
| EPS (₹, on post-bonus 51.7 crore shares) | 14.8 | 17.0 | 17.7 |
| Operating cash flow | 894 | 861 | 1,264 |
| Capex (net of subsidies) | 1,013 | 1,261 | 1,110 |
| Free cash flow | –120 | –399 | 155 |
Operating EBITDA is our own calculation. It strips out other income and the joint-venture profit. The company's reported EBITDA of ₹1,648 crore includes both.
The balance sheet at March 2026:
Net worth: ₹7,269 crore, or ₹140.41 per share
Gross debt: ₹1,366 crore
Treasury (mutual funds, deposits, cash): about ₹2,200 crore
Net cash: about ₹850 crore, by the company's definition
Plants under construction (CWIP): ₹1,415 crore, about a fifth of the asset base, not yet earning
A quick note on share count. Before the IPO, each ₹10 share was split into ten ₹1 shares. Then the company issued 4 bonus shares for every 1 held. That's why the annual report shows EPS of ₹885 but the DRHP shows ₹17.68. Same profit, 50 times more shares.
It's the market leader, by a distance. According to the industry report in the DRHP, INOX holds 22.4% of India's industrial gas market. It has 31.0% of the merchant segment and 17.8% of on-site. In glass it has 40.1%, and in metals 35.5%.
Its margins beat the listed peers. Here's how it stacks up against the two listed companies the DRHP compares it with, using FY26 numbers and September 29, 2026 closing prices:
FY26 | INOX Air Products | Linde India | Ellenbarrie |
|---|---|---|---|
| Revenue (₹ cr) | 3,034 | 2,531 | 342 |
| Revenue growth | 8.8% | 1.8% | 9.3% |
| Operating EBITDA margin (excl. other income) | 46.8% | 35.9% | 34.2% |
| Profit after tax (₹ cr) | 914 | 551 | 104 |
| Operating cash flow (₹ cr) | 1,264 | 786 | 133 |
| Free cash flow (₹ cr) | 155 | 25 | –25 |
| ROE | 13.4% | 13.7% | 12.9% |
| ROCE | 15.6% | 18.2% | 14.5% |
| Tankers owned | 739 | 180–200 | 70–90 |
| P/E (FY26 profit) | IPO pending | 95.9x | 50.0x |
Peer figures are standalone, from Screener (Linde India, Ellenbarrie). INOX's ROE and ROCE use the same formulas so they compare fairly. INOX's free cash flow is net of ₹52 crore of capital subsidies.
One caution on that table. Linde India's revenue includes low-margin plant construction contracts. According to the DRHP, these made up ₹768 crore of its revenue in FY24 and ₹445 crore in FY25. That shrinking is why Linde's revenue looks flat.
It has a lot of revenue locked in. On-site contracts run 15–20 years with take-or-pay terms. The company has about ₹3,619 crore of contracted revenue still to be recognised, on top of plant lease rentals.
Its balance sheet is strong. It holds net cash, has a AA+ credit rating, and generated ₹1,264 crore of operating cash last year.
There's more capacity coming. 4,314 tonnes per day (TPD) of new on-site capacity is under construction, including two 1,800 TPD plants for Tata Steel in Odisha. Another 921 TPD of merchant capacity is on the way. A specialty gas hub for semiconductor and solar plants is planned at Dholera, Gujarat.
Profit growth is a bit flattered. FY26 profit includes ₹47 crore from Bellary Oxygen, a joint venture with no business since November 2021. That's effectively a one-time payout. Other income also fell by ₹80 crore. Strip both out and core pre-tax profit grew about 9%, from roughly ₹895 crore to ₹978 crore.
Growth is steady, not explosive. Revenue grew 7.7% in FY25 and 8.8% in FY26. Investors usually pay 60x+ earnings for companies growing 20% or more. At 9% growth, a high multiple needs the new plants to deliver.
There's very little free cash. Over FY24–26, cumulative free cash flow was about –₹364 crore. Every rupee earned went back into plants, funded partly by ₹1,500 crore of new loans. Dividend payout is only about 2% of profit.
Returns are falling as capex rises. Adjusted return on capital employed (ROCE) fell from 30.2% in FY24 to 24.5% in FY26. Return on net worth is just 12.6%, partly because of ₹2,200 crore sitting in treasury. On Screener's simpler formula, INOX's ROCE is about 15.6%, below Linde India's 18.2%.
Customer concentration is rising. The top 5 customers made up 25.9% of revenue in FY26, up from 21.5% a year earlier. One unnamed customer alone brings in about 12%. An on-site plant serves just one customer. If that steel mill slows down, the plant can't easily move.
It depends on a few cyclical sectors. Steel, healthcare/pharma and auto make up 57% of revenue. A steel slowdown would hit both on-site volumes and merchant demand.
There's a disclosure point worth noting. Based on a legal opinion, the company no longer treats Gujarat Fluorochemicals and GFCL EV Products, INOX Group companies, as related parties. That change is backdated to October 2021, so transactions with them aren't disclosed as related-party dealings.
There may be more shares to come. With public holding around 16% after listing, promoters will need to sell more over time to reach 25%.
Our estimate is a price band of about ₹1,050–1,100 per share. That means a market cap of ₹54,300–56,900 crore, a P/E of 59–62x and an OFS of ₹8,100–8,500 crore. This is our own estimate. The official price band will be announced a few days before the IPO opens.
Here's how we got there, step by step.
Step 1: Pick the earnings. FY26 EPS is ₹17.68 on the post-bonus share count of 51.70 crore. If you remove the one-time ₹47 crore JV payout, core EPS is about ₹16.76. Bankers will price off the reported ₹17.68. You should keep the lower number in mind.
Step 2: See what the market pays for peers. FY26 numbers and September 29, 2026 closing prices:
Peer | Share price | Market cap (₹ cr) | FY26 profit (₹ cr) | P/E | FY26 operating EBITDA (₹ cr) | Market cap ÷ operating EBITDA | Price to book |
|---|---|---|---|---|---|---|---|
| Linde India | ₹6,200 | 52,855 | 551 | 95.9x | 909 | 58.1x | 12.5x |
| Ellenbarrie | ₹369 | 5,205 | 104 | 50.0x | 117 | 44.5x | 5.3x |
| Average | 73.0x | 51.3x | 8.9x |
Source: Screener (Linde India, Ellenbarrie), standalone figures. P/E = market cap ÷ FY26 profit. Operating EBITDA excludes other income, the same basis we use for INOX.
Step 3: Apply an IPO discount. Large offer-for-sale IPOs are usually priced below listed peers, to leave something on the table for new investors. A 15–20% discount to the 73x peer average gives roughly 58–62x.
Step 4: Convert to a share price.
Price = EPS × P/E = ₹17.68 × 58 to 62 = roughly ₹1,025 to ₹1,096 per share
Step 5: Cross-check three other ways.
EBITDA multiple. INOX's operating EBITDA is ₹1,421 crore. Peers trade at 44.5–58.1x, averaging about 51x. Apply 38–40x, a 20–25% discount. That gives ₹54,000–56,800 crore, or about ₹1,045–1,100 per share.
Deal size. In March, Reuters reported the IPO at around $1 billion. At ₹1,050–1,100, the 7.72 crore shares on offer come to ₹8,100–8,500 crore. That's roughly $0.9–1.0 billion, assuming about ₹88 to the dollar.
Price to book. At ₹1,075, the stock would trade at about 7.7x its book value of ₹140.41, between Ellenbarrie's 5.3x and Linde India's 12.5x.
All three land in roughly the same zone, which gives us some confidence in the range.
Scenarios at a glance:
Scenario | P/E | Price per share | Market cap (₹ cr) | OFS size (₹ cr) |
|---|---|---|---|---|
| Conservative | 52x | ~₹919 | ~47,500 | ~7,090 |
| Base case | 60x | ~₹1,061 | ~54,900 | ~8,190 |
| Aggressive | 68x | ~₹1,202 | ~62,100 | ~9,270 |
A quick note on retail lots. SEBI sets the minimum application at roughly ₹14,000–15,000. At ₹1,100, one lot would likely be about 13 shares.
What could push the band higher? Strong demand for large IPOs, or bankers anchoring closer to Linde India's 96x. What could pull it lower? Weak markets, or investors focusing on the 9% core growth and thin free cash flow.
This IPO is a great case study in reading a DRHP like an insider. Seven lessons:
Check whether a real pre-IPO price exists. The DRHP says no shares were issued or traded by promoters in the last three years, except the bonus issue. So there was no recent funding round and no real pre-IPO price. Some websites still show an "unlisted price" for INOX. One of them is simply the 2024 book value. Before trusting any unlisted quote, check the DRHP section "Price per share based on last five primary or secondary transactions".
Adjust for splits and bonuses. The ₹10 shares became fifty ₹1 shares after the split and the 4:1 bonus. Any pre-split unlisted price must be divided by 50 before you compare it with the IPO price.
Know who gets the money. In a fresh issue, cash goes to the company to fund growth. In an OFS, it goes to the sellers. INOX is 100% OFS, so the IPO doesn't make the company any bigger.
Compare the IPO price with what sellers paid. The DRHP's "weighted average cost of acquisition" shows sellers paid ₹0.06–7.49 per share. A big gap is normal for a 1999-era investment. But for a recent pre-IPO round, a huge gap is a warning sign.
Read the definitions behind the headline numbers. INOX's 51% "EBITDA margin" includes other income and is divided by total income. On a plain operating basis it's about 47%. Still excellent, but different.
Hunt for one-offs. The ₹47 crore JV payout made FY26 profit growth look better than core growth. Always check the notes for one-time gains.
Follow the cash, not just the profit. ₹914 crore of profit but near-zero free cash flow over three years tells you this is a reinvestment story. The ₹1,415 crore of unfinished plants is where future returns must come from.
One rule for anyone holding shares bought before an IPO: SEBI generally locks in pre-IPO shares of non-promoter holders for six months from the IPO allotment. So you can't always sell on listing day.
INOX Air Products is a high-quality, market-leading business with utility-like contracts and fat margins. The question isn't whether it's a good company. It's whether 9% core growth and thin free cash flow justify paying around 60x earnings. The answer depends on how fast the new plants and the electronic-gases bet start paying off.
Disclaimer: This article is for education only and is not investment advice. The price band is our own estimate based on public data and assumptions. The official price band and final prospectus may differ. Please consult a SEBI-registered adviser before investing.
Sources:
INOX Air Products DRHP dated September 30, 2026: financials, KPIs, offer structure, peer revenue mix, upcoming capacity ("Our Business").
INOX Air Products Annual Report FY2025-26: contracted revenue still to be recognised (Note 28), credit rating, projects under implementation (Board's Report).
Screener, FY26 figures and September 29, 2026 prices: Linde India, Ellenbarrie.