Shares of Godavari Biorefineries made a disappointing debut on the stock market on October 30, 2024. The company’s shares were listed at ₹308 on the National Stock Exchange (NSE), reflecting a 12.5% discount from the issue price of ₹352. On the Bombay Stock Exchange (BSE), the shares opened at ₹310.55, which is an 11.7% discount from the same issue price.
This muted performance was not entirely unexpected, as analysts had predicted a subdued listing based on the grey market premium (GMP) of around ₹5, indicating a potential listing gain of only about 1% for investors.
IPO Details and Subscription Rates
The initial public offering (IPO) of Godavari Biorefineries was open for bidding from October 23 to October 25, 2024. The IPO aimed to raise ₹554.75 crore, comprising a fresh issue of 92 lakh shares worth approximately ₹325 crore and an offer for sale (OFS) of 65 lakh shares valued at around ₹229.75 crore.
The IPO was subscribed 1.83 times, with qualified institutional buyers (QIBs) showing significant interest, subscribing 2.76 times their quota. Retail investors participated moderately, with their portion subscribed 1.71 times, while non-institutional investors (NIIs) undersubscribed at 0.90 times.
Godavari Biorefineries Shares Financial Utilization and Company Background
The proceeds from this IPO will be utilized primarily for debt repayment and general corporate purposes, with about ₹240 crore earmarked for clearing outstanding borrowings. Founded in 1956, Godavari Biorefineries is one of India’s prominent manufacturers of ethanol-based chemicals.
The company has a diverse product portfolio that includes bio-based chemicals, sugar, various grades of ethanol, and power generation. These products cater to several industries such as food and beverages, pharmaceuticals, personal care, and fuel.
Godavari Biorefineries Shares Market Reaction and Future Outlook
The initial reaction to Godavari Biorefineries’ listing has been lukewarm, reflecting broader market sentiments about the company’s financial health. For the financial year ending March 2024, Godavari reported a profit decline to ₹12 crore from ₹19.6 crore in the previous year, while revenue also fell from ₹2,014.7 crore to ₹1,686.7 crore. In the June 2024 quarter alone, the company posted a loss of ₹26.1 crore on revenue of ₹522.5 crore.
Brokerages have expressed mixed opinions regarding the IPO; some recommended subscribing while others advised caution due to the company’s recent financial performance and market conditions.
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
