Godavari Biorefineries IPO 2024: Everything You Need to Know About the ₹554.75 Crore Issue
Godavari Biorefineries Ltd. is set to launch its initial public offering (IPO) from October 23 to October 25, 2024. This IPO aims to raise approximately ₹554.75 crore and has generated considerable interest among investors. The price band for the shares has been fixed between ₹334 and ₹352 per share. This article provides a detailed overview of the IPO, including its pricing, market performance, and other important details.
Main Points
Godavari Biorefineries IPO Overview
Godavari Biorefineries, established in 1956, is a prominent player in the Indian chemical industry, primarily focusing on ethanol-based products. The company operates one of the largest integrated biorefineries in India, with a production capacity of 570 kiloliters per day (KLPD) for ethanol as of June 2024. Its diverse product portfolio includes various grades of ethanol, bio-based chemicals, sugar, and power, catering to sectors such as food, beverages, pharmaceuticals, and personal care.
IPO Details
- Issue Size: ₹554.75 crore
- Price Band: ₹334 to ₹352 per share
- IPO Dates: October 23 to October 25, 2024
- Allotment Date: October 28, 2024
- Refund Initiation: October 29, 2024
- Listing Date: October 30, 2024
- Lot Size: Investors can bid for a minimum of 42 shares, and thereafter in multiples of 42.
The IPO consists of a fresh issue worth ₹325 crore and an offer for sale (OFS) of ₹229.75 crore from existing shareholders. Notably, private equity firm Mandala Capital AG will completely exit its stake by selling 49,26,983 shares through the OFS.
Grey Market Premium (GMP)
As of October 19, 2024, the Grey Market Premium (GMP) for Godavari Biorefineries’ IPO is reported at ₹0. This indicates that there is currently no premium being offered over the issue price in the grey market. Investors often look at GMP as a gauge for potential listing gains.
Financial Performance
Despite being a leader in its sector, Godavari Biorefineries has faced financial challenges recently. For the fiscal year ending March 2024, the company’s profit declined to ₹12 crore, down from ₹19.6 crore the previous year. Revenue also saw a drop from ₹2,014.7 crore to ₹1,686.7 crore during the same period. In the June 2024 quarter, the company reported a loss of ₹26.1 crore on revenues of ₹522.5 crore.
Use of Proceeds
The funds raised through this IPO will be utilized for several purposes:
- Repayment of outstanding borrowings amounting to approximately ₹240 crore.
- General corporate purposes.
Market Position and Future Plans
Godavari Biorefineries holds a significant position in the ethanol market and is recognized as one of India’s largest producers by volume. The company plans to expand its distillery capacity from 600 KLPD to 1,000 KLPD, aligning with government initiatives aimed at increasing ethanol blending in fuel.The company supplies its products to several leading corporations including Hershey India and Hindustan Coca-Cola Beverages, which reflects its strong market presence.
Investor Insights
The IPO has attracted interest due to its strategic positioning within the growing biofuel sector. However, potential investors should consider the recent financial performance before making investment decisions.
Key Management
The IPO is being managed by Equirus Capital Private Ltd. and SBI Capital Markets Ltd., with Link Intime India Private Ltd. serving as the registrar for this offering.
