Godavari Biorefineries sets price band of Rs 334-352 a share for IPO

Private equity firm Mandala Capital AG will be exiting the company by selling the entire stake of 49,26,983 equity shares in the OFS

Godavari Biorefineries Ltd fixed a price band of Rs 334-352 per share for its Rs 555-crore initial public offering that will open for subscription on October 23.

The anchor bidding will start on October 22 and the issue will close on October 25. Basis of allotment will be on October 28 while refunds and credit of equity shares to demat account will be on October 29. The stock will list on exchanges on October 30.

The IPO consists a fresh issue of Rs 325 crore and an offer-for-sale (OFS) of up to 6.53 million shares by its existing shareholders and promoters.

Private equity firm Mandala Capital AG will be exiting the company by selling the entire stake of 49,26,983 equity shares in the OFS. The average cost of acquisition of these shares is Rs 188.91 per share.

In fact, it will be the largest selling shareholder in the offer-for-sale OFS, while other sellers in the OFS will be all promoters including Somaiya Agencies, Samir Shantilal Somaiya, Lakshmiwadi Mines and Minerals, Filmedia Communication Systems, and Somaiya Properties.

The proceeds from the fresh issue will be used for repaying debt amounting to Rs 240 crore, and the remaining funds will be utilised for general corporate purposes. It had consolidated debt of Rs 748.9 crore as of June 2024.

The firm is one of India’s largest producers of ethanol in terms of volume, having a bio-refinery with an installed capacity of 570 KLPD for manufacturing ethanol. The company owns a product portfolio of bio-based chemicals, sugar, different grades of ethanol and power, which are used by several industries such as food, beverages, pharmaceuticals, flavours & fragrances, power, fuel, personal care and cosmetics.

In light of the government initiatives for increasing fuel ethanol blending, the company intends to expand its distillery capacity from 600 KLPD to 1,000 KLPD.

Godavari Biorefineries supplies products to several marquee players such as Hershey India, Hindustan Coca-Cola Beverages, Karnataka Chemical Industries, Techno Waxchem, LANXESS India, IFF Inc, Ankit Raj Organo Chemicals, Escorts Chemical Industries, Khushbu Dye Chem, Privi Speciality Chemicals, Shivam Industries, as well as major oil marketing companies.

On the financial front, there seems to be no stability in the numbers. It had recorded profit of Rs 12.3 crore for the year ended March 2024, declining from Rs 19.6 crore in the previous year, while revenue dropped to Rs 1,686.7 crore, from Rs 2,014.7 crore during the same period. For the quarter ended June 2024, it has posted a loss of Rs 26.1 crore on revenue of Rs 522.5 crore.

The merchant bankers appointed for handling the public issue are Equirus Capital, and SBI Capital Markets, while Link Intime India is acting as the registrar to the offer.