Axiom Gas Engineering IPO Review (NSE SME) – Only Well-Informed/Cash Surplus Investors May Park Moderate Funds for Medium Term
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.
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.
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.
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.
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.
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
