The initial public offering (IPO) of Godavari Biorefineries Ltd. has officially opened for subscription today, October 23, 2024. This IPO aims to raise approximately ₹554.75 crore, consisting of a fresh issue and an offer for sale (OFS). Investors are keenly watching this offering, especially given the company’s significant role in the ethanol and bio-based chemicals sector in India.
Godavari Biorefineries IPO Details
Price Band and Lot Size
- Price Band: ₹334 to ₹352 per share
- Lot Size: Minimum of 42 shares
- Minimum Investment: ₹14,784 for retail investors
The IPO is structured with a fresh issue of 92 lakh shares worth ₹325 crore and an OFS component of 65.27 lakh shares valued at ₹230 crore at the upper end of the price band. The proceeds from the fresh issue will primarily be used to pay off debts amounting to ₹240 crore, with the remainder allocated for general corporate purposes.
Godavari Biorefineries IPO Subscription Status
As of the first day of bidding, Godavari Biorefineries’ IPO has been subscribed 27% overall. The retail individual investors (RIIs) segment saw a subscription rate of 48%, while non-institutional investors subscribed at a rate of 12%. The company had previously secured over ₹166 crore from anchor investors, which included notable participants like HDFC Mutual Fund and Goldman Sachs.
Godavari Biorefineries IPO Grey Market Premium (GMP)
The grey market premium (GMP) for Godavari Biorefineries was reported to be nil as of late October 22. This suggests a flat listing expectation at around ₹352 per share, which aligns with the upper end of the price band. However, it is essential to note that GMP is speculative and not an official price indicator.
Godavari Biorefineries IPO Key Dates
- IPO Opening Date: October 23, 2024
- IPO Closing Date: October 25, 2024
- Allotment Date: Expected on October 28, 2024
- Listing Date: Scheduled for October 30, 2024 on BSE and NSE.
Company Overview
Godavari Biorefineries is one of India’s leading manufacturers in the ethanol-based chemicals sector. The company operates an integrated bio-refinery with a production capacity of 570 kilo-liters per day as of June. Its diverse product portfolio includes bio-based chemicals, sugar, various grades of ethanol, and power generation. These products serve multiple industries such as food and beverages, pharmaceuticals, personal care, and fuel.
The company emphasizes sustainability by minimizing waste and promoting eco-friendly practices throughout its operations. It exports its products to over 20 countries worldwide.
Godavari Biorefineries IPO Analyst Opinions
Analysts have mixed views on the IPO. While some see potential due to liberalized ethanol production norms and increasing demand for biofuels, others express caution due to the company’s significant debt levels. For instance:
- Swastika Investmart has assigned a neutral rating, highlighting financial challenges.
- Canara Bank Securities recommends a ‘Subscribe’ rating for long-term investors who are willing to accept associated risks.
Investment Considerations
Investors considering participation in the Godavari Biorefineries IPO should weigh the potential benefits against the risks posed by high debt levels and market conditions. It is advisable to consult financial advisors and thoroughly review the red herring prospectus before making investment decisions.
