Ethanol and bio-based chemicals maker Godavari Biorefineries plans to raise Rs 700 crore through an initial public offering (IPO).
The Godavari Biorefineries IPO date has not been announced yet. The Mumbai-based company is currently observing the geopolitical situation and will make its share market debut ‘at the right time’, per a PTI report.
The company has already received the final approval of the Securities and Exchange Board of India (SEBI) to float the IPO.
“We got SEBI’s final comments on our IPO request during November-end (2021). We have one year to get listed. We will look at the right time for the listing,” Godavari Biorefineries CEO and Managing Director Samir Somaiya told the news agency.
The proceeds from the Godavari biorefineries Ltd IPO will be utilised for the investment in Karnataka, he said.
The Godavari biorefineries Ltd IPO is expected to comprise a mix of primary and secondary offerings totalling about Rs 700 crore.
Godavari Biorefineries filed its draft red herring prospectus (DRHP) with SEBI in September 2021.
According to the DRHP, Godavari Biorefineries IPO comprises a fresh issue worth Rs 370 crore and an offer for sale of up to 65,58,278 equity shares by promoters and existing investors.
In the DRHP, the company informed that Samir Shantilal Somaiya and Somaiya Agencies plan to offload 5 lakh equity shares each. Mandala Capital will sell up to 49.27 lakh equity shares. Around 3 lakh equity shares will be offloaded by Filmedia Communication Systems, around 1.31 lakh by Somaiya Properties and Investments, and 2 lakh equity shares by Lakshmiwadi Mines and Minerals.
While Godavari Biorefineries Ltd IPO price and other details are yet to be finalised, the company in its DRHP said it plans to use the fund raised through the fresh issuance to repay debt and to fund capital expenditure for sugarcane crushing and potato units.
According to media reports, the book running lead managers to the issue are JM Financial Ltd and Equirus Capital Private Ltd.
Somaiya said Godavari Biorefineries is currently assessing the geopolitical situation and will float the IPO once it feels “the market is once again ready for the listing.”
“We will see how the geopolitical situation changes and if the time is right and the market is once again ready for the listing, then we will plan the listing,” said the CEO.
About Godavari Biorefineries
Godavari Biorefineries has two manufacturing units — Bagalkot, Karnataka and Ahmednagar, Maharashtra.
It is the largest ethanol producer in India, with an installed capacity of 380 kilolitres per day (KLPD) as of June 2021 and capacity utilisation of 58.87% for Q1 2021.
The company is looking to expand its installed capacity to 570 KLPD by November this year as it sees a huge opportunity in green and sustainable chemistry.
Godavari Biorefineries is in the development stage for manufacturing second-generation ethanol and energy cane and is also working heavily in research.
“We have done a lot of work on 2nd, 3rd (generation) ethanol. We think the time for that will come (for the 2nd generation of ethanol). We know how to do it and gaps that need to be filled. I will say it is in the development stage,” Somaiya said.
Apart from ethanol, the Mumbai based company has a diversified portfolio that comprises bio-based chemicals, sugar, rectified spirits, other grades of alcohol, and power. The company has customers in over 20 countries.
What is an IPO?
IPO stands for initial public offering. It is a mechanism through which private companies raise capital from general public for the first time in exchange of ownership in the company.
Which companies are eligible for IPO?
According to NSE, the company applying for the IPO must have a paid-up equity capital of at least Rs 10 crore and a capitalisation of not less than Rs 25 crore.
How do geopolitical factors impact business?
Geopolitical factors refer to any international political conflict, wars, tensions that has the potential to disrupt finances or operations of businesses across the world. The ongoing Russia-Ukraine conflict is one such example.
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