Godavari Biorefineries' GMP muted ahead of issue opening on October 23

The shares of Godavari Biorefineries, whose IPO opens on October 23, are not seeing much demand in the unlisted market ahead of its issue opening. The current GMP is Rs 0, which indicates a flat to negative listing if the current trends sustain.

However, it is important to note that grey market premiums are just an indicator as to how the company's shares are stacked up in the unlisted market and are subject to change rapidly.

Godavari Biorefineries has announced a price band of Rs 334-352 per share for its Rs 555-crore IPO, which will close on October 25.


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

Private equity firm Mandala Capital AG will exit the company, selling its entire stake of 49,26,983 shares in the OFS. Mandala’s average cost of acquisition is Rs 188.91 per share, making it the largest seller in the OFS, alongside promoters Somaiya Agencies, Samir Shantilal Somaiya, Lakshmiwadi Mines and Minerals, Filmedia Communication Systems, and Somaiya Properties.
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Proceeds from the fresh issue will be used to repay Rs 240 crore of debt, with the remainder allocated for general corporate purposes. As of June 2024, Godavari Biorefineries had consolidated debt of Rs 748.9 crore.

The company is one of the largest ethanol producers in India by volume, with a bio-refinery capacity of 570 KLPD for ethanol production. Its diverse portfolio includes bio-based chemicals, sugar, ethanol, and power, catering to industries such as food, beverages, pharmaceuticals, personal care, and fuel. In line with government initiatives to boost ethanol blending, Godavari plans to expand its distillery capacity from 600 KLPD to 1,000 KLPD.

Godavari Biorefineries supplies products to leading companies including Hershey India, Hindustan Coca-Cola Beverages, and LANXESS India, among others.

Financially, the company's profit fell to Rs 12.3 crore for the year ending March 2024, down from Rs 19.6 crore the previous year, while revenue dropped to Rs 1,686.7 crore from Rs 2,014.7 crore. For the June 2024 quarter, the company posted a loss of Rs 26.1 crore on revenue of Rs 522.5 crore.

The IPO is being managed by Equirus Capital and SBI Capital Markets, with Link Intime India serving as the registrar.

The allotment will be finalized on October 28, and refunds and share credits will take place on October 29, followed by the stock listing on October 30.

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