– By Dilip Davda
- The company is engaged in the business of distribution and retailing of auto liquefied petroleum gas to retail customers.
- Currently its network is present in Telangana, Karnataka and Maharashtra.
- It posted growth in its top and bottom lines for the reported periods.
- Based on its recent average financial data, the issue appears aggressively priced.
- Only well-informed/cash surplus investors may park moderate funds for medium term.
ABOUT COMPANY:
Axiom Gas Engineering Ltd. (AGEL) is engaged in the business of distribution and retailing of Auto Liquefied Petroleum Gas. The operations are carried out through a network of Auto LPG Dispensing Stations owned and operated by the Company. In addition to retail outlets, the Company has developed storage and allied infrastructure facilities to support the distribution and supply of Auto LPG.
The Company’s network is presently spread across the states of Telangana, Karnataka, and Maharashtra. The retail operations are structured to cater to the requirements of the transport sector, with Auto LPG being marketed as an alternative automotive fuel. The Company’s infrastructure includes storage, handling, and dispensing facilities designed to meet regulatory standards applicable to Auto LPG distribution.
The business model of the Company is based on the sale of Auto LPG to end consumers through its ALDS network. The Company procures Auto LPG from suppliers and undertakes storage, transportation, and distribution to its dispensing stations. The revenues are primarily derived from the retail sale of Auto LPG at its outlets. The Company continues to focus on the operation and expansion of its dispensing network and associated facilities, with an emphasis on maintaining compliance with regulatory requirements applicable to Auto LPG storage and distribution.
The Auto LPG market in India is growing. As of April 1, 2025, there are 440 Auto LPG Dispensing Stations (ALDS) across the country, operated by Public Sector Oil Marketing Companies. Auto LPG sales stood at 73.2 thousand metric tonnes (TMT) in Fiscal 2025. The Southern region accounts for approximately 83.6% of Auto LPG volume sales. At the retail level, the Company sells Auto LPG to end consumers in the transport segment through metered dispensing, with station operations covering product receipt, custody transfer, storage, dispensing, cash and digital collections, reconciliation, and daily reporting.
Revenue is derived primarily from the retail sale of Auto LPG, with pricing determined by procurement cost, freight and handling, operating expenses, statutory levies, and prevailing market conditions, subject to applicable regulations. Key cost components include product cost, transportation, storage operations, utilities, maintenance, station staffing, rentals or site-related charges, regulatory compliances, and periodic inspections. As of March 31, 2026, it had 19 employees on its payroll.
ISSUE DETAILS/ CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 9398000 equity shares of Rs. 5 each to mobilize Rs 49.81 cr. at the upper cap. The company has announced a price band of Rs. 50 – Rs. 53 per share. The minimum application to be made is for 4000 shares and in multiples of 2000 shares thereon, thereafter. The IPO opens for subscription on September 18, 2026, and will close on September 22, 2026. The IPO constitute 26.59% of the post-IPO paid-up capital of the company. The shares will be listed on NSE SME Emerge. From the net proceeds, it will utilize Rs. 27.60 cr. for capex on expansion of ALDS Network/LPG storage and bottling plants, etc., Rs. 9.12 cr. for repayment/pre-payment of loans, and the rest for general corporate purposes.
The IPO is solely lead managed by SKI Capital Services Ltd., while KFin Technologies Ltd., is the registrar to the issue. Sunflower Broking Pvt. Ltd., is the market maker. This IPO is underwritten to the tune of 15% by SKI Capital and 85% by sunflower Broking.
The company has issued/converted initial equity capital at par value, and issued further equity shares at a fixed price of Rs. 50 per share in November 2024. It has also issued bonus shares in the ratio of 50 for 1 in November 2024. The average cost of acquisition of shares by the promoters is Rs. 0.0392, Rs. 0.0400, Rs. 0.1045, and Rs. 0.1046 per share.
Post-IPO, company’s current paid-up equity capital of Rs. 12.97 cr. (25946000 equity shares) will stand enhanced to Rs. 17.67 cr. (35344000 equity shares). Based on the upper band of the IPO pricing, the company is looking for a market cap of Rs. 187.32 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has reported a total income/net profit of Rs. 74.54 cr. / Rs. 5.74 cr. (FY24), Rs. 89.85 cr. / Rs. 7.75 cr. (FY25), and Rs. 100.78 cr. / Rs. 9.45 cr. (FY26). It marked growth in its top and bottom lines for the reported periods. However, its margins are very surprising and appears to be a window dressing for paving the way for fancy valuations of the IPO
For the last three fiscals, the company has reported an average EPS of Rs. 3.19, and an average RoNW of 31.95%. The issue is priced at a P/BV of 4.13 based on its NAV of Rs. 12.83 per share as of March 31, 2026, and at a P/BV of 2.25 based on its post-IPO NAV of Rs. 23.51 per share.
If we attribute FY26 super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 19.85, and based on FY25 earnings, the P/E stands at 24.20. The issue appears aggressively priced, based on its average earnings.
For the reported periods, the company has posted PAT margins of 7.70% (FY24), 8.63% (FY25), 9.38% (FY26), and RoCE margins of 27.01%, 30.50%, 28.90%, respectively, for referred periods.
DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its future prospects, and financial performance.
COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Confidence Petroleum, Aegis Logistics, as its listed peers. They are currently trading at a P/E of 21.7, and 38.7 (as of September 16, 2026). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.
MERCHANT BANKER’S TRACK RECORD:
This is 7th mandate from SKI Capital, in the last three fiscals (including the ongoing fiscal. Out of the last 6 listings, 4 at discount, 1 opened at discount, 1 at par, and the rest with premium ranging from 16.09% to 90.00% on the date of listing.
CONCLUSION:
AGEL is engaged in the business of distribution and retailing of auto liquefied petroleum gas to retail customers. Currently its network is present in Telangana, Karnataka and Maharashtra. It posted growth in its top and bottom lines for the reported periods. Based on its recent average financial data, the issue appears aggressively priced. This segment is not fancied by investors as it has not performed on expected lines. Only well-informed/cash surplus investors may park moderate funds for medium term.
Review By Dilip Davda on August, 2026
Review Author
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detailed fundamental and financial analysis of companies coming up with IPOs helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
