Overview of the IPO Plan

India's Matrix Gas & Renewables, a unit of Gensol Group, aims to capitalize on the country’s flourishing IPO market, with plans to raise ₹10 billion to ₹12 billion (approximately $119-$143 million) through an Initial Public Offering (IPO). The announcement was made by CEO Chirag Kotecha during the Renewable Energy India Expo, highlighting the company’s intention to leverage the favorable market conditions to fund its ambitious green hydrogen projects.

The company is set to file for its IPO next year, hoping to benefit from a period that has seen a rush of Indian companies going public amid a red-hot equity market. The Indian market has witnessed significant investor interest in the renewable and sustainability sectors, with the equity market reaching multiple record highs over the past few months.

As of September 2024, nearly 250 companies have already raised more than $9 billion, surpassing the total funds raised in 2023. This trend reflects the investor confidence in the growth potential of innovative sectors such as renewable energy and green hydrogen, positioning Matrix Gas & Renewables favorably for its upcoming IPO.

Green Hydrogen Projects and Capex Plans

Matrix Gas & Renewables is focused on expanding India's green hydrogen production capabilities and is targeting the development of 1,000 megawatts of green hydrogen projects over the next three years. These projects align with India's ambitious targets for renewable energy and reduction of carbon emissions, positioning Matrix Gas at the forefront of the country’s clean energy transition.

To support this ambitious plan, the company has outlined a capital expenditure (capex) of ₹35 billion. The capex will be raised through a combination of 70% debt and 30% equity across multiple tranches. This approach demonstrates the company’s balanced strategy to ensure financial viability while expanding its renewable portfolio.

The investment will be utilized in various stages of project development, including infrastructure setup, electrolyzer procurement, and the establishment of hydrogen storage facilities. By harnessing the potential of green hydrogen, Matrix Gas aims to contribute to the decarbonization of industries and transportation, thus helping India meet its climate goals.

India's IPO Market Boom

The Indian IPO market is experiencing a remarkable boom. The equity market has continued to set new records, driven by strong investor confidence in companies focusing on sustainable and growth-oriented projects. With favorable market dynamics, companies in renewable energy, electric mobility, and clean technology are attracting significant attention from both institutional and retail investors.

This trend of a robust equity market is expected to benefit Matrix Gas & Renewables as the company prepares to file for its IPO. The increasing interest in renewable energy projects further solidifies the potential for Matrix Gas to achieve successful capital raising through its offering, allowing it to expand its green hydrogen initiatives.

Valuation of Matrix Gas & Renewables: Unlisted IPO Shares

Let’s take a closer look at the valuation of Matrix Gas & Renewables based on its unlisted IPO shares:

• As of October 31, 2023, the total number of shares outstanding stood at 18,014,666.

• After that, Matrix Gas issued additional shares in various tranches, with the details provided below:

  Date	No. of Shares
  17.11.2023	250,000
  12.12.2023	13,333
  09.12.2023	400,000
  29.02.2024	967,500
  01.03.2024	1,338,750
  07.03.2024	1,296,000
  11.03.2024	1,565,000
  15.03.2024	307,500
  15.03.2024	1,116,250
  22.04.2024	575,000
  08.07.2024	375,000

• Total Outstanding Shares as of 08.07.2024 = 26,218,999 (~2.6 crore shares).

• At the Unlisted Pre-IPO Price of INR 900 per share, the market capitalization (Mcap) of Matrix Gas & Renewables stands at approximately INR 2,300 crore.

Expected Financial Performance & Valuation

Matrix Gas is expected to report a Profit After Tax (PAT) of INR 98 crore for the FY 2024-25. Given the current market capitalization and the projected earnings, the expected forward Price-to-Earnings (P/E) ratio for the company is 25x. This valuation reflects investor expectations for significant growth in the company’s green hydrogen projects and its contribution to India's renewable energy sector.

About Matrix Gas & Renewables

Matrix Gas & Renewables, a subsidiary of the Gensol Group, is committed to advancing India's renewable energy goals by focusing on green hydrogen production. The company’s green hydrogen projects aim to develop a more sustainable energy landscape and provide solutions for industries looking to decarbonize.

With its strategic approach of combining debt and equity for funding, and an active focus on innovative renewable technologies, Matrix Gas is positioning itself as a key player in India’s energy transition. The upcoming IPO is expected to bring the much-needed capital for expanding their renewable infrastructure, while also offering investors a chance to participate in the growing green hydrogen market.

By leveraging its parent company's expertise in renewable energy and committing to large-scale projects, Matrix Gas & Renewables is poised to make a significant impact on India's renewable energy capabilities. Its foray into green hydrogen production is a crucial step toward achieving long-term energy sustainability in the country.

Conclusion

Matrix Gas & Renewables is at the forefront of India's green energy revolution, with ambitious plans to raise capital and scale its green hydrogen production capabilities. With an upcoming IPO aiming to raise ₹10-12 billion, the company is poised to take advantage of the robust IPO market and meet the growing demand for renewable energy solutions. Investors interested in participating in India’s clean energy transformation should keep a close watch on Matrix Gas’s public offering, as the company looks set to play a pivotal role in the nation's energy future.