Shares of Godavari Biorefineries are up 12.5% compared to the previous trading day
Godavari Biorefineries made its market debut on October 30, 2024, listing at a twelve-five percent discount to the issue price. Here are five key insights from the IPO listing and the company’s market strategy.
Shares of Godavari Biorefineries opened at Rs 308 on the NSE and Rs 310.55 on the BSE, down from the issue price of Rs 352. This weak start reflects investor caution as the market remains mixed.
The public offering of Rs 554.75 crore opened for subscription from October 23 to October 25, closed with strong interest. Overall, the IPO was subscribed 1.76 times, receiving bids for 2.06 crore shares against 1.10 crore shares on offer. The sales segment was subscribed 1.76 times, while qualified institutional buyers (QIBs) showed strong interest with a subscription of 2.76 times. However, the non-institutional investor (NII) category had a lukewarm response, with a subscription of 0.93 times.
The offer consisted of a fresh issue of 0.92 crore shares, amounting to Rs 325 crore, and an offer for sale (OFS) of 0.65 crore shares worth Rs 229.75 crore. On October 22, 2024, the company also raised Rs 166.42 crore from anchor investors, receiving early interest in the IPO.
Proceeds from the new issue are mainly earmarked for debt repayment or prepayments and for general corporate purposes, giving the company a strategic financial boost as it tries to downsize and focus on expansion.
Founded in 1956, Godavari Biorefineries is a major player in bio-based chemicals, sugar, ethanol, and energy, serving industries such as food and beverages, pharmaceuticals, and cosmetics. The company has 18 patents and exports to more than 20 countries. Its biorefinery in Maharashtra has an ethanol production capacity of 570 KLPD, and is globally recognized as the leading producer of MPO by volume. In FY24, Godavari saw a decline in revenue of 15.92 percent, while its profit after tax (PAT) declined by thirty-seven percent-three-seven points.
Through this listing, Godavari Biorefineries aims to leverage its diverse product portfolio and innovative capabilities to increase its market reach and operational efficiency.
