Godavari Biorefineries Secures Rs 166 Crore from Anchor Investors Before IPO Launch

Godavari Biorefineries Ltd, a producer of ethanol and bio-based chemicals, announced it raised over Rs 166 crore from anchor investors. This announcement came just before the opening of its initial public offering (IPO) for public subscription. The anchor investors include HDFC Mutual Fund, Whiteoak Capital Fund, Goldman Sachs Singapore Pte Ltd, Societe Generale, and SBI General Insurance, as per a BSE circular.

The company allocated 47.28 lakh equity shares to 19 funds at Rs 352 each, which is the upper price band of the IPO. This allocation amounts to a transaction size of Rs 166.42 crore. Of these shares, 23.74 lakh shares, representing 50.22% of the total allocation, were given to six domestic mutual funds across ten schemes.

IPO Details and Allocation

The IPO is priced between Rs 334 and Rs 352 per share and will be open for subscription from October 23 to October 25. It consists of a fresh issue of equity shares worth Rs 325 crore and an Offer-for-Sale (OFS) of 65.27 lakh equity shares valued at Rs 230 crore by promoters and an investor. This results in a total IPO size of Rs 555 crore.

Mandala Capital AG Ltd, a private equity firm, is selling 49.27 lakh shares through the OFS route. The proceeds from the fresh issue will be used mainly for debt repayment, with Rs 240 crore allocated for this purpose, while the remaining funds will be used for general corporate purposes.

Market Valuation and Investor Allocation

At the upper end of the price band, Godavari Biorefineries' market valuation is estimated at Rs 1,800 crore. The issue size is divided with half reserved for qualified institutional buyers, 35% for retail investors, and the remaining 15% for non-institutional investors.

Based in Maharashtra, Godavari Biorefineries is a leading manufacturer of ethanol-based chemicals in India. Its diverse product range includes bio-based chemicals, sugar, various grades of ethanol, and power. These products are used in industries such as food, beverages, pharmaceuticals, flavours & fragrances, power, fuel, personal care, and cosmetics.

Industry Growth and Market Insights

According to a Frost & Sullivan Report, there is significant growth in the bio-based chemicals market due to increasing demand for environmentally sustainable solutions. In 2023, this market was valued at USD 97.2 billion and is expected to grow at a compound annual growth rate (CAGR) of 10.4% from 2023 to 2028.

SBI Capital Markets and Equirus Capital Markets are serving as the book-running lead managers for this public issue.