Industrial Gas Distribution
Bulk-to-cylinder gas conversion, dry ice and delivery across north-western India.
Executive summary
| Business | Established distributor and cylinder filler of industrial gases |
| What it does | Buys gas in bulk, carries it in its own tankers, fills cylinders, makes dry ice and delivers or releases for collection |
| Sector | Industrial gases — distribution and filling |
| Region | North-western India |
| Operating history | Nearly three decades; private limited company |
| Operating sites | Two, in state industrial estates; owned road fleet |
| Customers and end-markets | Broad industrial base: fabrication, food and beverage, cold chain, process and laboratory users |
| Ownership | Promoter-held with a small minority; no subsidiaries |
| Transaction | Stake, structure and perimeter disclosed to parties that sign a non-disclosure agreement |
FY 2022–23 to FY 2024–25 come from audited standalone statements. FY 2025–26 comes from the Company’s final accounts for the year ended 31 March 2026, covering both sites and provided as audited. The first half of FY 2026–27 is head-office only and unaudited, and appears only as a recency note in section 07.
EBITDA is profit before tax plus depreciation and finance cost. Adjusted EBITDA adds back directors’ remuneration only and is not a normalised figure. This is a draft, subject to management confirmation.
Investment highlights
Each feature below is evidenced by the Company’s accounts and carries the figure that supports it.
Growth in each of the last three years
Revenue grew 28.9%, 28.2% and 10.4% in successive years from the same two sites, with the pace easing in the latest year.
22.2% revenue CAGR, FY 2022–23 to FY 2025–26Margins widened as volume grew
Cost of goods and operating costs both fell as a share of revenue while the business scaled; the walk is in sections 04 and 07.
+4.2 pp adjusted EBITDA margin since FY 2022–23An owned fleet and plant base
Plant, mobile tanks and a dry-ice machine (₹441.97 lakh) with heavy and delivery vehicles (₹136.42 lakh) make up 89% of the net block.
₹649.66 lakh net fixed assets, 31 March 2026Low and falling leverage
Borrowings, mainly secured vehicle loans, fell 25.2% in the year to ₹141.24 lakh, against cash and bank of ₹97.51 lakh.
0.25x debt to equity (0.42x a year earlier)A regional platform a buyer can extend
Two sites in state industrial estates, an owned fleet, cylinder gases and dry ice, and nearly three decades of operation give a producer or consolidator a base to add volume to.
2 sites · own fleet · cylinder gases + dry iceBusiness overview
The Company turns bulk gas into liquid gas, filled cylinders and dry ice. Its own vehicles carry gas in from suppliers and products out to customers.
Liquid and cylinder gases
Oxygen, carbon dioxide, argon, nitrogen and other industrial gases; cylinder handling and testing are recurring cost lines.
Dry ice
Solid carbon dioxide made on the Company’s own dry-ice machine, recorded in the asset register.
Road fleet and delivery
Mobile tanks bring gas in and delivery vehicles take cylinders out; customers may also collect.
Capacity, storage and filling data by site are not presented in this summary and will be provided in the data room.
Business model & economics
The Company earns the margin between the bulk price it pays and the price of delivered cylinders and dry ice. Running its own fleet is the main cost, and customers lodge deposits on cylinders they hold.
Liquid and cylinder oxygen and carbon dioxide lines dominate; the margin comes from converting bulk gas into filled cylinders.
Deposits have risen in each of the four years and fund part of the cylinder base (table below).
Product range runs from argon and nitrogen to refrigerant and specialty gases, cylinders and fittings.
Repeat purchase is built into the cylinder model because customers return empty cylinders for refilling. Contract terms and price lists are not presented in this summary.
| Measure | FY 2022–23 | FY 2023–24 | FY 2024–25 | FY 2025–26 |
|---|---|---|---|---|
| Cost of goods (purchases and stock movement) | 60.2% | 60.2% | 57.6% | 57.5% |
| Operating expenses before directors’ remuneration | 27.3% | 27.0% | 27.1% | 25.9% |
| Directors’ remuneration | 1.1% | 1.1% | 0.8% | 2.8% |
| Reported EBITDA margin | 11.4% | 11.8% | 14.7% | 13.8% |
| Receivable days (on revenue) | 49.6 | 33.5 | 37.1 | 52.2 |
| Payable days (on purchases) | 99.6 | 76.2 | 66.9 | 77.8 |
| Customer security deposits (₹ lakh) | 39.70 | 50.79 | 64.12 | 74.96 |
Customer mix & concentration
Customers are industrial, food, cold-chain and process users who reorder as cylinders are emptied. A repeat order is triggered by the return of empty cylinders.
The table sets out the five largest head-office accounts under fixed codes, reconciled to revenue.
| Customer | Invoices | Sales net of GST | Share of head-office sales |
|---|---|---|---|
| A | 78 | 158.08 | 11.6% |
| B | 362 | 95.87 | 7.0% |
| C | 130 | 83.02 | 6.1% |
| D | 123 | 70.95 | 5.2% |
| E | 66 | 49.92 | 3.7% |
| Top 5 | 759 | 457.83 | 33.6% |
| Customers 6–10 | — | 221.96 | 16.3% |
| All other head-office customers (281) | — | 682.52 | 50.1% |
| Head-office sales, net of GST | 8,099 | 1,362.31 | 100.0% |
| Second-site sales (not in register) | — | 354.87 | — |
| Revenue | — | 1,717.18 | — |
The base, in numbers
Customer A is the only account above 10% of head-office sales, and no account exceeds 12%. The tail is broad, but one-fifth of revenue sits in a second-site book that carries no customer-level data in this summary.
Financial snapshot
Revenue has grown in each year, margins have widened and the balance sheet is funded mainly by retained profit.
The table sets out four years of results and the change in the latest year.
| ₹ lakh | FY 2022–23 (audited) | FY 2023–24 (audited) | FY 2024–25 (audited) | FY 2025–26 | YoY |
|---|---|---|---|---|---|
| Revenue from operations | 941.67 | 1,213.35 | 1,556.09 | 1,717.18 | 10.4% |
| Other income | 0.08 | 1.76 | 3.59 | 0.21 | n.m. |
| Cost of goods sold | 567.14 | 730.31 | 896.42 | 987.12 | 10.1% |
| Operating expenses | 267.42 | 341.13 | 434.44 | 492.67 | 13.4% |
| EBITDA (reported) | 107.19 | 143.67 | 228.81 | 237.60 | 3.8% |
| Adjusted EBITDA | 117.19 | 156.87 | 242.01 | 285.60 | 18.0% |
| Finance cost | 10.62 | 12.35 | 12.97 | 15.93 | 22.8% |
| Depreciation and amortisation | 35.42 | 35.32 | 44.85 | 55.77 | 24.3% |
| Profit before tax | 61.15 | 96.00 | 170.99 | 165.90 | -3.0% |
| Tax expense | 16.36 | 25.14 | 43.42 | 51.04 | 17.5% |
| Profit after tax | 44.78 | 70.86 | 127.57 | 114.86 | -10.0% |
Balance sheet, 31 March 2026 — liabilities
Balance sheet, 31 March 2026 — assets
- Reported EBITDA grew 3.8% against 18.0% for adjusted EBITDA; the gap is directors’ remuneration (section 07).
- Depreciation rose 24.3% on the enlarged fleet and tax 17.6%, so profit after tax fell 10.0%.
- Trade receivables rose 55.1% against revenue growth of 10.4%.
Profit after tax fell 10.0% in FY 2025–26 while revenue grew 10.4%, and receivable days stretched from 37.1 to 52.2. A buyer will test both against the second-site accounts.
Quality of earnings
Reported EBITDA is profit before tax plus depreciation and finance cost. Adjusted EBITDA adds back directors’ remuneration and nothing else.
The bridge below runs from profit to both earnings measures and carries the margins charted above.
| ₹ lakh | FY 2022–23 | FY 2023–24 | FY 2024–25 | FY 2025–26 |
|---|---|---|---|---|
| Profit before tax | 61.15 | 96.00 | 170.99 | 165.90 |
| + Depreciation | 35.42 | 35.32 | 44.85 | 55.77 |
| + Finance cost | 10.62 | 12.35 | 12.97 | 15.93 |
| EBITDA (reported) | 107.19 | 143.67 | 228.81 | 237.60 |
| + Directors’ remuneration | 10.00 | 13.20 | 13.20 | 48.00 |
| Adjusted EBITDA | 117.19 | 156.87 | 242.01 | 285.60 |
| Gross margin | 39.8% | 39.8% | 42.4% | 42.5% |
| Reported EBITDA margin | 11.4% | 11.8% | 14.7% | 13.8% |
| Adjusted EBITDA margin | 12.4% | 12.9% | 15.6% | 16.6% |
Margin bridge. Reported EBITDA margin fell 0.9 pp in FY 2025–26: cost of goods and operating costs saved 1.3 pp, but directors’ remuneration took 1.9 pp (section 04).
The one add-back. Directors’ remuneration rose from ₹13.20 lakh to ₹48.00 lakh, which alone explains why adjusted EBITDA grew faster than reported. A buyer will replace the promoters’ roles at a market cost, so adjusted EBITDA overstates maintainable earnings by that amount.
Cash conversion. No cash-flow statement was provided, so operating cash flow against EBITDA is not shown. Leverage: net debt was ₹43.73 lakh, or 0.18x reported EBITDA, with finance cost up from ₹10.62 lakh to ₹15.93 lakh over the four years, covered 14.9 times in FY 2025–26.
Capex cycle. Net additions to fixed assets were ₹152.30 lakh, ₹155.84 lakh and ₹97.97 lakh in the last three years, equal to 106%, 68% and 41% of reported EBITDA. The split between replacement and growth spending has not been analysed.
Perimeter and related parties. FY 2025–26 covers both sites; earlier years are standalone statements, and the second site’s earlier treatment should be confirmed in diligence. Office rent is paid to a promoter-director and part of the gas is purchased from related entities; amounts are not presented.
Recency. The latest year ended seven months before this draft, and the statutory-auditor opinions seen cover FY 2023–24 and FY 2024–25. The first half of FY 2026–27 is shown below, head office only and unaudited, with no depreciation or tax recorded; it is not like-for-like with the full-year figures.
Recency note — 1 April to 30 September 2026, ₹ lakh unless stated
Management & organisation
The Company is promoter-led. The two promoter-directors are the whole board and a minority shareholder holds the remainder.
| Role | Shareholding | Board |
|---|---|---|
| Promoter-Director (1) | 51% | Director for over twenty years |
| Promoter-Director (2) | 44% | Director since the late 2010s |
| Minority shareholder | 5% | Not a director |
The statutory auditor issued unmodified opinions for FY 2023–24 and FY 2024–25 and reported no pending litigation affecting the Company’s financial position. It also reported that the accounting software’s audit-trail feature was not enabled throughout either year for all relevant transactions. Headcount and an organisation chart below board level are not presented.
No second line of management is documented. A buyer should plan for a defined transition period and for building or bringing in a second line.
M&A proposition
The promoters are inviting proposals from buyers and investors for the business. Terms are set out after a non-disclosure agreement.
What is on offer
Growth in each of the last three years, from a base of two sites.
Both in state industrial estates, with an owned fleet; capacity data follows in the data room.
A single-entity perimeter keeps financial diligence simple.
Industrial-gas producers
Downstream reach through cylinder filling, a delivery fleet and local customers.
Regional distributors and consolidators
An additional hub with its own sites, fleet and deposit base.
Financial investors with a sector thesis
A profitable, low-leverage base for a buy-and-build in gas distribution.
Operating gearing
More volume through the existing sites and fleet is the most direct lever, since operating costs fell as a share of revenue (section 04).
Balance-sheet headroom
Low leverage (section 07) leaves room to fund fleet or site additions without new equity.
Supply integration
Purchases of goods for resale were about ₹1,003 lakh in FY 2025–26; a producer-buyer could supply part of this volume.
No use of proceeds is stated in the Company’s documents; it will be set out with the transaction terms.
Risks & mitigants
The risks below are stated as a buyer will read them, with what mitigates each.
Customer A is 11.6% of head-office sales and the second-site book carries no customer data here. Mitigant: 291 head-office customers and none above 12%; the top-twenty table will be provided in the data room.
Receivable days rose from 37.1 to 52.2, and receivables grew far faster than revenue. Mitigant: Receivables fell to ₹186.36 lakh by 30 September 2026 on head-office accounts; ageing to be shared in the data room.
Two promoter-directors run the Company with no documented second line. Mitigant: A defined transition period and a hired second line can be built into the transaction terms.
Part of the gas is bought from related entities and the rent is paid to a promoter-director. Mitigant: Terms to be disclosed after the non-disclosure agreement; an arm’s-length supply agreement can be a completion condition.
Adjusted EBITDA adds back ₹48.00 lakh of directors’ remuneration against ₹13.20 lakh a year earlier. Mitigant: The bridge is shown line by line in section 07; a buyer applies its own replacement cost.
The audit-trail feature was not enabled throughout FY 2023–24 and FY 2024–25 for all relevant transactions. Mitigant: Opinions were unmodified; remediation status is to be confirmed with management and tested in diligence.
Gas is bought in bulk and sold delivered, so supplier price moves reach margin unless passed on. Mitigant: Gross margin widened across the period; contract and pass-through terms are not presented and will be tested.
Capacity, contract terms and cash-flow data are not presented in this summary. Mitigant: These will be provided in the data room after the non-disclosure agreement.
Process & next steps
The adviser runs the process. Please send all enquiries to the adviser and do not approach the Company, its employees, customers or suppliers.
Express interest
Confirm interest and sign the non-disclosure agreement.
Detailed information
Receive named information, data-room access and answers to written questions.
Meet management
Management meeting and visits to both sites.
Offer and diligence
Non-binding offer, then due diligence and definitive agreements.
Disclaimer
This Confidential Information Summary has been prepared by CA Dhiraj Ostwal & Co. (“the Adviser”) from information provided by the Company and its financial statements. It is provided solely to help recipients decide whether to take part in a possible transaction, is confidential, and may not be copied, distributed or disclosed without the Adviser’s prior written consent.
The information has not been independently verified. No representation or warranty, express or implied, is given by the Company, its shareholders, directors, employees or the Adviser as to its accuracy, completeness or reasonableness, and no liability is accepted for any loss arising from its use. Statements about future performance, if any, are not forecasts and must not be relied on.
This document is not an offer or invitation to buy or sell any securities or assets and forms no basis for any contract. Recipients must make their own investigation and take their own legal, tax, financial and technical advice. The Adviser and the Company may change the process, end discussions with any party or reject any proposal at any time. Figures may not add because of rounding. On request, recipients must return or destroy this document and all copies.