From GMP to finance, everything you need to know is here.
Godavari Biorefineries Limited is planning an IPO size of Rs. 554.75 crore. The company plans to combine new equity shares worth Rs. The proposed sale of ₹229.75 crore at a price of ₹32.5 billion will commence on October 23, 2024. The offering will close on October 25, 2024 and will be listed on the stock exchange on October 30, 2024. In this article, we will look at the analysis of Godavari Biorefineries Limited IPO. Let’s dig in!
Godavari Biorefineries Limited – IPO Information
Godavari Biorefineries Limited’s GMP is not yet initiated. I will update this article later.
promoter: Samir Shantilal Somaiya, Lakshmiwadi Mines and Minerals Private Limited, Sakarwadi Trading Company Private Limited and Somaiya Agency Private Limited.
Book Operations Lead Manager: Equirus Capital Private Limited, SBI Capital Markets Limited Proposal registered by: Link Intime India Private Limited
purpose of the problem
● Rs 240 crore will be used for repayment and prepayment of certain outstanding borrowings of the company.
● The remainder is used for general corporate purposes.
Godavari Biorefineries Limited IPO Company Overview
Godavari Biorefineries Limited, established in 1956, is a leading manufacturer of ethanol-based chemicals in India. As of June 30, 2024, the Company operates an integrated biorefinery with a capacity of 570 KLPD for ethanol production. Notably, it is the world’s largest producer of MPO and the only Indian manufacturer of bio-ethyl acetate.
The company’s diverse product portfolio includes bio-based chemicals, sugars, various grades of ethanol and power. These products are suitable for industries such as food, beverage, pharmaceuticals, flavors and perfumes, power, fuel, cosmetics, and personal care products. Godavari Biorefineries serves customers in more than 20 countries, including Australia, China, Germany, France, Italy, Japan, Kenya, Netherlands, Singapore and the United States.
The company has just two manufacturing facilities – at Bagalkot in Karnataka and Ahmednagar in Maharashtra – and Godavari Biorefineries employs 1,583 full-time employees, including 52 research staff. As of October 2024, the company has secured 18 patents and holds 53 registrations for its products in several countries.
Godavari Biorefineries Limited IPO Financial Analysis
A financial analysis of Godavari Biorefineries Limited shows that the company’s revenue declined by 16.28% from ₹2,014.69 crore in FY23 to ₹1,686.67 crore in FY24. Godavari Biorefineries Limited earned a revenue of Rs 522.53 crore in the first quarter of FY25.
The company earned revenue of 33.42% from sugar, 29.97% from bio-based chemicals, 33.30% from distillery, 2.54% from cogeneration and 0.76% from unallocated in FY24. The company generated 83.35% of its revenue from India and 16.65% from outside India.
Godavari Biorefineries Limited’s net profit declined 37.37% from ₹19.64 crore in FY23 to ₹12.3 crore in FY24. The company’s net loss in the first quarter of FY25 was as follows:
26.11 crore. Godavari Biorefineries Limited’s EBITDA margin increased from 7.67% in FY23 to 8.77% in FY24. PAT margin decreased from 0.97% to 0.72% in FY24.
In FY24, the company’s ROE and ROCE should be 4.73% and 9.53%, respectively. The company increased its total borrowings from 100 billion won to 100 billion won. In March 2024, it was ₹654.06 trillion and in June 2024, it was ₹693.7 million.
Also read…
Client base:
Godavari Biorefineries Limited’s customer base includes major companies such as Hershey India Pvt Ltd, Hindustan Coca-Cola Beverages Private Limited, M/s Karnataka Chemical Industries, M/s Techno Waxchem Pvt Ltd, LANXESS India Private Limited, IFF Inc., Ankit Raj Organo Includes businesses. Chemicals Limited, Escorts Chemical Industries, Khushbu Dye Chem Pvt Ltd, Privi Specialty Chemicals Limited, Shivam Industries and major oil marketing companies.
The company’s listed associates:
Godavari Biorefineries Limited’s peer competitors include Alkyl Amine Chemicals Limited, Jubilant Ingrevia Limited, Laxmi Organic Industries Limited, EID Parry (India) Limited, Triveni Engineering and Industries Limited, Balrampur Chini Mills Limited, Dalmia Bharat Sugar & Industries Limited, Dhampur Sugar Mills Limited, and Dwarikesh Sugar Industries Limited.
The image below shows the comparison of Godavari Biorefineries Limited with its peers.
Strengths of Godavari Biorefineries Limited
● The company has a diversified product portfolio producing ethanol, chemicals and power. Biochemical products, especially bioethyl acetate, contribute significantly to the sales mix.
● Godavari Biorefineries Limited has a long history of building credibility among customers and investors in the biorefinery sector.
● Godavari’s wide range of products caters to multiple industries, provides resilience to market fluctuations and creates numerous avenues for revenue generation. ● Godavari Biorefineries Limited exports to over 20 countries, accounting for 17% of its overseas sales revenue in FY 2023.
● The company leverages over 80 years of expertise from the Somaiya Group. Leadership anticipates trends and effectively guides expansion.
Weaknesses of Godavari Biorefineries Limited
● The company’s strong domestic and international presence is relatively small, limiting its access to broader markets and potential growth opportunities. ● The complexity of biorefinery processes increases production costs, which may impact profitability and pricing strategies compared to conventional fuels. ● Fluctuations in raw material prices may affect the stability of our operations, leaving us vulnerable to supply chain disruptions and market volatility.
● Reliance on agricultural inputs makes companies vulnerable to climate-related disruptions that could disrupt production capacity and supply chains.
conclusion:
In conclusion, Godavari Biorefineries Limited plans to raise capital through IPO with a focus on ethanol-based production. The company’s financial condition is stable, but concerns are growing due to a recent decline in sales. Nonetheless, the diverse product line, especially of bio-based chemical products, strengthens growth prospects. The timing is right for the IPO to establish itself as a significant player in the ethanol sector, capitalizing on the growing demand for ethanol.
Start your stock market journey now!
Want to learn stock market trading and investing? Check out exclusive stock market courses from FinGrad, a learning initiative from Trade Brains. You can sign up for free courses and webinars from FinGrad and start your trading career today. Sign up now!!
