Godavari Biorefineries, a key player in ethanol and bio-based chemicals, opened its Initial Public Offering (IPO) today, with the subscription period running from October 23 to October 25, 2024.
Based in Maharashtra, the company is India’s largest producer of bio-based chemicals, including ethanol, sugar, and bioenergy products. With the increasing focus on sustainable energy and cleaner chemistry, this IPO has captured the attention of both institutional and retail investors.
Godavari Biorefineries IPO Details
The IPO consists of a combination of fresh equity shares worth ₹325 crore and an Offer for Sale (OFS) of 65.27 lakh equity shares, making the total IPO size ₹555 crore. The price band for the IPO has been set at ₹334 to ₹352 per equity share, and the minimum lot size is 42 shares.
The funds raised from this IPO will be utilized for debt repayment and general corporate purposes, with ₹240 crore of the fresh issue earmarked for debt reduction.
| IPO Details | Key Figures |
|---|---|
| Price Band | ₹334 – ₹352 |
| Lot Size | 42 shares |
| Fresh Equity Issue | ₹325 crore |
| Offer for Sale (OFS) | ₹230 crore |
| Total IPO Size | ₹555 crore |
| Reserved for Retail Investors | 35% |
| Reserved for QIBs | 50% |
Godavari Biorefineries IPO Subscription Status
On Day 1, the subscription status for the Godavari Biorefineries IPO was modest, with an overall subscription of 6% by 11:00 AM IST. The retail portion saw 11% subscription, while Non-Institutional Investors (NIIs) subscribed 3% of their allotted shares. The Qualified Institutional Buyers (QIBs) segment has not yet been subscribed.
GMP Update for Godavari Biorefineries IPO
As of today, the Grey Market Premium (GMP) for the Godavari Biorefineries IPO is at ₹0, indicating that there is neither a premium nor a discount in the grey market. This suggests that investor sentiment is cautious, and the stock may list near its issue price on the listing date.
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Should You Subscribe to Godavari Biorefineries IPO?
Systematix Institutional Equities has given a subscribe rating to the IPO, citing favorable government policies towards ethanol production and the increasing demand for bio-based chemicals. According to Systematix, the company’s focus on R&D and commitment to creating cleaner chemistry positions it well for long-term growth.
| Expert Opinion | Verdict |
|---|---|
| Systematix Institutional Equities | Subscribe |
| Swastika Investmart Ltd | Neutral |
However, Swastika Investmart Ltd is more cautious, pointing to the company’s high debt load and recent financial struggles. While the company stands to benefit from the government’s liberalized ethanol production norms, Swastika advises investors to approach the IPO with caution due to the high valuation and existing challenges.
Conclusion: Is Godavari Biorefineries IPO a Buy?
If you believe in the long-term potential of the bio-based chemicals and ethanol industries, Godavari Biorefineries could be a good investment. The company has strong growth prospects, driven by favorable government policies and growing customer demand for safer chemicals. However, potential investors should be aware of the company’s debt burden and consider their risk appetite before subscribing.
Key Dates:
| Event | Date |
|---|---|
| IPO Subscription Ends | 25th October 2024 |
| IPO Allotment | 30th October 2024 |
| Listing Date | 2nd November 2024 |
Disclaimer
This article is for informational purposes only. Please consult a financial advisor for professional investment advice.
