Godavari Biorefineries IPO: Financials, Key Risks And More, All You Need To Know

Godavari Biorefineries Ltd.'s initial public offering (IPO) of Rs 554.75 crore is scheduled to open on Wednesday. The IPO consists of a fresh issue of equity shares worth Rs 325 crore and an offer-for-sale (OFS) worth Rs 229.75 crore.

The price band for the IPO offer has been set in the range of Rs 334–352 per share.

Private equity firm Mandala Capital AG will be exiting the company by selling the entire stake of 49 lakh shares in the OFS. The selling promoters include Somaiya Agencies Pvt., Samir Shatilal Somaiya, Lakshmiwadi Mines and Minerals Pvt., Filmedia Communications Systems Pvt. and Somaiya Properties and Investments Pvt.

The lead book running managers of the IPO are SBI Capital Markets Ltd. and Equirus Capital Pvt.

Issue Details

• Issue opens: Oct. 23

• Issue closes: Oct. 25

• Issue price: Rs 334-352

• Fresh issue: Rs 325 crore

• Offer For Sale: Rs 229.75 crore

• Total issue size: Rs 554.75 crore

Use Of Proceeds

• Repayment/pre-payment in full or in part of certain outstanding borrowings availed by the company.

• General corporate purposes.

Business Overview

The company is a manufacturer of ethanol-based chemicals in India and, as of March 31, 2024, has the largest integrated bio-refinery in India in terms of installed capacity.

It is one of India’s largest producers of ethanol in terms of volume as of March 31, 2024. It posted declining trends in its bottom lines and, in particular, marked a loss in the first quarter of fiscal 2025. This is attributed to the sudden ban imposed by the government of India on ethanol blending.

The company's diversified product portfolio comprises bio-based chemicals, sugar, different grades of ethanol, and power. These products find application in a range of industries, such as food, beverages, pharmaceuticals, flavours and fragrances, power, fuel, personal care, and cosmetics.

Over the years, the company has significantly expanded their scale of operations and global footprint and has customers from over 20 countries, including Australia, China, France, Germany, Italy, Japan, Kenya, the Netherlands, Singapore, Switzerland, the United Kingdom, the United Arab Emirates, Indonesia, and the United States of America.

Godavari Biorefineries IPO Risk Factors

• Reliance on a limited number of suppliers for a significant portion of raw materials, excluding sugarcane, may negatively impact manufacturing operations and results if supply disruptions occur.

• A large portion of revenue is derived from a few key products, and any decline in revenue from these products could adversely affect operational results.

• The availability of sugarcane, molasses, and feedstock is critical for the sugar, distillery, and cogeneration segments. Any shortage in these raw materials may negatively impact operations and growth prospects.

• The sugar, distillery, and cogeneration businesses are vulnerable to seasonal fluctuations, adverse weather conditions, crop diseases, and pest attacks, which can reduce crop yields and the availability of sugarcane, potentially affecting business performance and financial results.

• A significant portion of ethanol revenue depends on sales to oil marketing companies under the Government of India's ethanol blended petrol program. Any negative changes in government policy could have an adverse effect on revenue, operations, and financial health.

• Limited ability to control the prices of sugarcane, ethanol, and sugar may impact profitability and operational results.