Godavari Biorefineries Limited IPO: A Closer Look
Godavari Biorefineries’s ₹555 crore IPO is set to open on the 23rd of October. The proposed initial share sale includes a fresh issue of equity shares worth Rs 325 crore and an Offer for Sale (OFS) of 65.27 lakh equity shares valued at Rs 230 crore, at the upper end of the price band, by promoters and an investor.
Here’s a quick overview of the company, IPO details including objective and company’s financials to analyse – should you invest?
Company Overview
Godavari Biorefineries Limited is a leading player in the Indian ethanol-based chemicals industry, operating an integrated biorefinery with a 570 KLPD ethanol production capacity. The company is renowned for its diverse product portfolio, including bio-based chemicals, sugar, various ethanol grades, and power, serving industries such as food, beverages, pharmaceuticals, cosmetics, and energy.
IPO Details
Parameter | Details |
IPO Dates | October 23-25, 2024 |
Face Value | ₹10 per share |
Price Band | ₹334-₹352 per share |
Lot Size | 42 Shares |
Total Issue Size | ₹554.75 Cr |
Listing Exchange | BSE, NSE |
Promoters | Samir Shantilal Somaiya, Lakshmiwadi Mines and Minerals Private Limited, and Somaiya Agencies Private Limited |
IPO Objective
Godavari Biorefineries IPO issue is a combination of offer for sale (OFS) to the tune of ₹230 crores (65.27 lac equity shares) and fresh issue of equity shares worth ₹325 crores, at the upper price band. Private equity firm Mandala Capital AG Ltd will be offloading 49.27 lakh shares through the OFS route.
The proceeds from fresh issue will be used for:
- repayment/pre-payment of outstanding borrowings
- general corporate purposes.
Key Strengths of Godavari Biorefineries
- Diverse Product Portfolio: The company offers a wide range of bio-based chemicals, catering to various industries.
- Integrated Biorefinery: The company’s integrated facility allows for efficient production and cost-effective operations.
- Research and Development: Godavari Biorefineries invests in R&D to develop innovative products and stay ahead of the competition.
- Strong Market Position: The company is a leading player in the Indian ethanol-based chemicals market.
Potential Risks
- Raw Material Dependence: The company relies on a few suppliers for raw materials, which could pose risks in the event of supply disruptions.
- Material Cost Fluctuations: Fluctuations in material costs could impact on the company’s profitability.
- Customer Concentration: Dependence on a few key customers could make the company vulnerable to changes in their demand or financial conditions.
Financial Performance
Period Ended | Assets (INR Cr) | Revenue (INR Cr) | Profit After Tax (INR Cr) |
31 Mar 2024 | 1991.66 | 1701.06 | 12.3 |
31 Mar 2023 | 1743.52 | 2023.08 | 19.64 |
31 Mar 2022 | 1733.54 | 1709.98 | 19.1 |
Should You Invest?
The decision to invest in the Godavari Biorefineries IPO depends on your individual investment goals and risk tolerance. While the company offers several attractive features, it’s essential to carefully consider the potential risks and conduct thorough due diligence before making an investment.
Key Factors to Consider
- Long-Term Outlook: Assess the company’s growth potential in the ethanol-based chemicals market.
- Risk Tolerance: Evaluate your comfort level with the inherent risks associated with investing in IPOs.
Investment Goals: Determine if this IPO aligns with your overall investment objectives.
Conclusion
Godavari Biorefineries Limited’s IPO presents an opportunity for investors to participate in the growth of a leading player in the Indian ethanol-based chemicals industry. However, it’s crucial to conduct thorough research and consider the associated risks before making an investment decision.