Axiom Gas Engineering Limited IPO

01At a glance

What the company does — distributes and retails auto LPG, the gas used by auto-rickshaws, taxis and small commercial vehicles, through a network of Auto LPG Dispensing Stations (ALDS) that it owns, with storage to supply them (RHP p.123, RHP p.103).

Who pays it — drivers filling up at its stations; there are no large customers, and trade receivables were 3 days of revenue in FY26 (RHP p.106). Telangana was 60.42% of FY26 revenue (RHP p.126).

Why it is raising money — ₹2,760.00 lakh for capital expenditure, mostly new stations, and ₹912.45 lakh to repay borrowings, with the balance for general corporate purposes (RHP p.76).

How fast it has grown — revenue from ₹7,453.80 lakh in FY24 to ₹10,075.82 lakh in FY26, about 16.3% a year, and profit after tax from ₹574.08 lakh to ₹945.35 lakh, about 28.3% a year (our arithmetic, RHP p.106).

The one thing to understand — this is a single-fuel retail business that depends on three suppliers for 99.75% of its LPG and on a group company for most of its transport (RHP p.23). Its growth comes from adding stations: 16 at the start of FY24 and 22 at the end of FY26 (RHP p.126).

02The business, in plain words

Axiom purchases auto LPG from a few suppliers, holds it in storage, trucks it to its stations and sells it by the litre to vehicle drivers (RHP p.126, RHP p.127). The stations are owned by the company and run day to day by third-party operators, who pay a one-time signing fee when given a site (RHP p.130).

A driver needs fuel → fills auto LPG at an Axiom station → Axiom purchases the gas from suppliers and trucks it in → Axiom keeps the retail margin after gas, freight, operator commission and site rent.

The company was incorporated in 2007; promoter Alpeshkumar Naginbhai Patel started it and Sadique Abdul Kadar Banani joined in 2012 (RHP p.123). It had 19 employees at March 2026 (RHP p.131). Retail prices are set from procurement cost, freight, operating expenses and levies, and the cost of the gas depends on the public-sector oil companies' prices (RHP p.127, RHP p.25).

Earnings equation: Profit ≈ litres sold × (retail price − gas and freight cost) − operator commission − site rent and upkeep − interest. In FY26 purchases were ₹6,932.78 lakh, operator commission ₹527.12 lakh, outlet rent ₹569.93 lakh and site maintenance ₹274.42 lakh against revenue of ₹10,075.82 lakh (RHP p.50, RHP p.200).

03Where the money comes from

Source: RHP p.199.

By state, FY26 revenue was Telangana 60.42%, Maharashtra 31.39% and Karnataka 8.19% (RHP p.126). Three stations — L B Nagar (12.17%), Tadband (10.73%) and Mill Corner (10.60%) — made up about a third of FY26 LPG sales (RHP p.126). All of the consultancy income in FY24 and FY25 came from a group company, Czar Metric System (RHP p.206). Revenue does not depend on a few customers; it depends on a few stations and a few suppliers.

04The growth record

Source: RHP p.106, RHP p.51.

Net worth was ₹1,385.07 lakh, ₹2,383.01 lakh and ₹3,328.36 lakh; return on equity 41.45%, 32.52% and 28.40%; return on capital employed 27.01%, 30.50% and 28.90% (RHP p.106). Our arithmetic: revenue grew about 16.3% a year from FY24 to FY26, EBITDA about 24.3% and profit about 28.3%; EBITDA margin rose 193 basis points and PAT margin 168 basis points (RHP p.106).

05What the growth is made of

New stations. The network went from 16 stations at the start of FY24 to 17, 20 and then 22 at the end of FY26, with no closures (RHP p.126). Stations opened in FY24 and FY25 — Mallepally, Hubli, Deghori and Malkajgiri — sold ₹2,071.30 lakh of LPG in FY26 against ₹926.54 lakh in FY25 (our arithmetic, RHP p.126, RHP p.78). LPG sales rose about 19.4% a year from FY24 to FY26 (our arithmetic, RHP p.199).

The prospectus does not disclose litres or kilograms sold, so the increase cannot be split into volume and price. The company says increases in revenue are "by and large linked to increases in the volume of business" (RHP p.231).

06Earnings quality

Inventory is the item that stands out: stock in trade rose from ₹410.05 lakh at March 2023 to ₹1,655.83 lakh at March 2026, 89 days of cost for a business that is paid in cash at the pump (RHP p.199, RHP p.106). The prospectus does not say where that stock is held or why it is that large. FY24 and FY25 profit included ₹382.50 lakh and ₹389.10 lakh of consultancy and signing income that did not recur in FY26 (RHP p.199).

07The balance sheet

At March 2026, long-term borrowings were ₹1,029.27 lakh and short-term borrowings ₹213.78 lakh; the business chapter gives total borrowings of ₹1,605.98 lakh (RHP p.49, RHP p.125). Cash was ₹588.96 lakh, of which ₹417.33 lakh was cash in hand (RHP p.51). Other long-term liabilities were ₹1,180.30 lakh (RHP p.49); several loans in the borrowing schedule were taken to repay security deposits to operators (RHP p.215). Capital work in progress was ₹787.47 lakh (RHP p.49). Contingent liabilities were ₹30.46 lakh, for GST and TDS (RHP p.20).

After the issue: at the upper band the fresh issue adds ₹5,074.92 lakh before expenses, against net worth of ₹3,328.36 lakh, and ₹912.45 lakh of it is to repay debt (our arithmetic, RHP p.49, RHP p.76).

08What the money is for

Source: RHP p.76, RHP p.77.

Of the ₹1,800.00 lakh for stations, ₹452.13 lakh repays the company for money it has already spent: five of the 12 stations were commissioned between the draft and this prospectus, and a sixth was about 75% complete (RHP p.76, RHP p.78). Stations opened in FY24 to FY26 cost ₹108.80 lakh each on average (RHP p.78). The money is scheduled for deployment in FY27 (RHP p.101).

Into the business the whole issue: up to 93,98,000 new shares, ₹5,074.92 lakh at the upper band (our arithmetic, RHP p.46). To selling shareholders nothing: there is no offer for sale (RHP p.46).

09Who is selling

No one. The issue is entirely new shares issued by the company (RHP p.46).

10Promoters

The promoters are Alpeshkumar Naginbhai Patel, Kinnari Alpeshkumar Patel, Sadique Abdul Kadar Banani and Asma Mohamad Sadique Banani, who have around 26 years of experience in oil and gas according to the prospectus (RHP p.2, RHP p.123). Nikhil Tiwari became managing director in June 2024, and Asma Mohamad Sadique Banani became joint managing director in November 2024 (RHP p.168).

Promoter economics: the promoters' average cost is ₹0.1046 a share for Alpeshkumar Naginbhai Patel, ₹0.1045 for Sadique Abdul Kadar Banani, ₹0.0400 for Asma Mohamad Sadique Banani and ₹0.0392 for Kinnari Alpeshkumar Patel, after a 50-for-1 bonus issue in November 2024 (RHP p.71, RHP p.64). Alpeshkumar Naginbhai Patel and Sadique Abdul Kadar Banani each drew ₹48.00 lakh in FY24, ₹12.00 lakh in FY25 and nothing in FY26 (RHP p.206). The promoters have given personal guarantees for company loans (RHP p.31).

11Who already owns it

The four promoters hold 2,54,96,940 of the 2,59,46,000 shares, or 98.27% (RHP p.68). In November 2024 the company placed 4,46,000 shares at ₹50 each with nine investors (RHP p.64, RHP p.65). If the whole issue is allotted, the promoters would hold about 72.1% of 3,53,44,000 shares (our arithmetic, RHP p.47, RHP p.68). The company had 16 shareholders at the date of the prospectus (RHP p.71).

12What changed just before the IPO

• The company became a public company in July 2024 (RHP p.123).
• New managing director, joint managing director, CFO and company secretary were appointed in June and November 2024 (RHP p.168).
• The face value was split from ₹10 to ₹5 in November 2024, followed the same month by a 50-for-1 bonus and a placement at ₹50 (RHP p.64).
• Promoter salaries fell from ₹48.00 lakh each in FY24 to nothing in FY26 (RHP p.206).
• Consultancy and signing income stopped in FY26 (RHP p.199).
• Two applications for procedural lapses are pending with the Registrar of Companies (RHP p.234).

13Capacity and expansion

The company does not manufacture; its capacity is its station network and storage. It had 22 stations at March 2026 (RHP p.126) and plans 12 more in Maharashtra, Telangana and Karnataka, five of them already commissioned (RHP p.78). The prospectus says a new station typically takes seven to eight months to generate revenue (RHP p.26). Land for the 12 sites is leased, at a stated cost of ₹157.75 lakh (RHP p.84). The prospectus does not give throughput per station in litres or the utilisation of its storage.

14Market size and industry structure

As claimed — at April 1, 2025, India had 440 auto LPG stations run by the public-sector oil companies, and auto LPG sales were 73.2 thousand tonnes in FY25, citing government data (RHP p.124). The company did not commission an industry report for the prospectus (RHP p.34).

The part that is addressable — auto LPG sold to vehicles in the three states where the company operates. The prospectus does not size that market.

What the company is today — 22 stations and ₹10,075.82 lakh of FY26 LPG sales (RHP p.126). The prospectus does not give its volume in tonnes, so its share of the national figure cannot be worked out.

15Competitive position

The prospectus names competition from existing fuel retailers and new station operators in its markets, and the risk of substitution by CNG, electric vehicles and other fuels (RHP p.26, RHP p.124). Customers choose a station by location, turnaround time and the fuel's cost relative to alternatives (RHP p.127). The company owns no trademark or logo it operates under (RHP p.29).

16Peers the company named

Peers named in the offer document: Confidence Petroleum India and Aegis Logistics (RHP p.105).

Source: RHP p.105; peer P/E at NSE closing prices of July 22, 2026 (RHP p.104). Confidence Petroleum's revenue is about 47 times Axiom's and Aegis Logistics' about 83 times, and both run businesses well beyond auto LPG retail (our arithmetic, RHP p.105).

17Valuation at the issue price

At the upper band of ₹54, with the full 93,98,000 new shares added to 2,59,46,000 existing shares (our arithmetic, RHP p.46, RHP p.47):

Source: RHP p.103, RHP p.104, RHP p.106. At the lower band of ₹51 the market capitalisation is ₹18,025.44 lakh (our arithmetic, RHP p.47). Enterprise value on the shares before the issue, with March 2026 borrowings of ₹1,605.98 lakh and cash of ₹588.96 lakh, is ₹15,027.86 lakh, 9.7 times FY26 EBITDA (our arithmetic, RHP p.125, RHP p.51, RHP p.106). After the issue, book value including the gross proceeds would be about ₹8,403.28 lakh, and the market capitalisation at the upper band 2.3 times that (our arithmetic, RHP p.49).

The two peers the prospectus names traded at 26.70 and 52.81 times earnings on July 22, 2026 (RHP p.104). At the upper band the issue is priced at 14.8 times FY26 EPS on the prospectus's own share basis and 20.2 times FY26 profit on the enlarged share count.

18Subscription

From the NSE issue page, read on 22 September 2026 before the final day's bidding: the issue had been bid 0.86 times for the 83,28,000 shares on offer outside the anchor portion, with bids for 71,26,000 shares in 984 applications. Individual investors had bid for 36,72,000 shares, non-institutional investors 28,82,000 and qualified institutions 5,72,000. The anchor allocation is shown as 10,70,000 shares. Individual investors must apply for at least two lots, so that each application exceeds ₹2,00,000 (RHP p.47); at the upper band two lots of 2,000 shares cost ₹2,16,000.

19Risks, in plain words

Suppliers — three suppliers provided 99.75% of LPG purchased in FY26 (RHP p.23) → a supply disruption would leave stations dry → the largest single supplier was 43.45% of purchases (RHP p.125).

Transport by a group company — Prime Fuel Logistics, a group company, carries most of the LPG (RHP p.23) → the company depends on a related party for delivery → ₹379.57 lakh was paid to it in FY26 (RHP p.206).

Geography and a few stations — Telangana was 60.42% of FY26 revenue (RHP p.126) → local regulation or competition there moves the whole company → three stations made about a third of LPG sales (RHP p.126).

Pricing — gas cost depends on public-sector oil company prices (RHP p.25) → changes pass through to margin → the prospectus does not give a margin per kilogram.

Debt — unsecured loans can be recalled at any time (RHP p.25) → total borrowings were ₹1,605.98 lakh at March 2026 (RHP p.125) → ₹912.45 lakh is to be repaid from the issue (RHP p.76).

Issue-specific — no monitoring agency will oversee the use of proceeds (RHP p.33), and general corporate purposes are not quantified (RHP p.76).

20Litigation and regulatory matters

There is no criminal or material civil litigation against the company or the promoters (RHP p.234). The prospectus also records past lapses in regulatory filings with the Registrar of Companies (RHP p.24).

21Related-party transactions

Source: RHP p.21, RHP p.206; amounts for transport, materials and consultancy include taxes. The FY25 operator commission was paid to Feroz Eliyas Mohammed, the CFO (RHP p.206). The company relies on Czar Metric System for machinery and equipment (RHP p.30).

22What the offer document does not say

Litres or kilograms of LPG sold, in total or per station, are not disclosed. The retail margin per kilogram is not disclosed. Why inventory rose to 89 days of cost, and where it is held, is not explained. The terms of the operator agreements, including security deposits and commission rates, are not set out in the pages read. The amount for general corporate purposes and the issue expenses are left blank.

23Five questions for management

1. How many kilograms of auto LPG did the company dispense in each of FY24, FY25 and FY26, and at what margin per kilogram?
2. Why was stock in trade ₹1,655.83 lakh, or 89 days of cost, at March 2026, and where is it held?
3. How do the rates paid to Prime Fuel Logistics compare with quotes from unrelated transporters?
4. What are the ₹1,180.30 lakh of other long-term liabilities, and on what terms are operator deposits held and repaid?
5. What throughput does a new station need to cover its ₹108.80 lakh average cost, and how long did the five stations commissioned this year take to reach it?

1Sources and cited facts

This study was read from 1 document the company filed. The 73 figures it cites are listed under the document each came from, with the page and the sentence as printed.