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  1. Godrej Agrovet Rs 1,160 crore IPO price band set at Rs 450-460

Godrej Agrovet Rs 1,160 crore IPO price band set at Rs 450-460

Godrej Industries agri-business company Godrej Agrovet has set a price range of Rs 450-460 per equity share for its public offer. We take a look at five key things about Rs 1,160 share sale.

By: | Published: September 26, 2017 3:21 PM
Godrej Agrovet has business interests in agri-inputs, animal feeds, palm oil manufacturing, dairy, poultry and processed foods. (Image: Reuters)

Godrej Industries agri-business company Godrej Agrovet has set a price range of Rs 450-460 per equity share for its public offer. This will be the first public offer of Godrej group in 8 years and it will remain open for three days for subscription, starting from 4 October to 6 October. The company had filed draft red herring prospectus (DRHP) with SEBI (Securities and Exchange Board of India) in July and received its ‘observations’ on 8 September. Godrej Agrovet is an agriculture-business based company incorporated in 1991. We take a look at five key things about the share sale.

IPO details

Godrej Agrovet initial public offering is expected to raise up to Rs 1,160 crore, company said in a public notice on Tuesday. The animal-feed producer Godrej Agrovet will sell new shares worth up to Rs 292 crore, while its main shareholder Godrej Industries will sell secondary shares of an amount worth Rs 300 crore. A unit of Singapore’s Temasek Holdings will sell up to 1.23 crore shares, which at the upper end of the price range would be worth Rs 566 crore. Kotak Mahindra Capital Company, Axis Capital and Credit Suisse Securities (India) will manage the company’s public issue. Earlier in June, Godrej Industries announced that its board “has decided to participate in the IPO of equity shares by Godrej Agrovet Ltd”.

IPO proceeds

Each of the selling shareholders will be entitled to the respective portion of the proceeds of the OFS (offer for sale). The company will not receive any proceeds from the OFS. The net proceeds from the fresh issue will be utilised towards repayment of loans and for other general corporate purposes. It includes repayment or prepayment of working capital facilities availed by the company, repayment of commercial papers issued by the company and general corporate purposes which is subject to the applicable laws.

Pre-IPO placement

Besides the public offer, the company is considering a pre-IPO placement of up to 5.6 lakh equity shares worth up Rs 252 crore. Recently, about 50 Godrej group employees have reportedly bought shares worth around Rs 8.5 crore in the pre-initial public offering (IPO) round of Godrej Agrovet. The participation in the round came from the group firms which include Godrej Consumer Products, Godrej Properties, Nature’s Basket, Godrej Tyson Foods and Godrej and Boyce Manufacturing Company.

Business profile

Godrej Industries owns 60.81% in Agrovet, which is in businesses such as agri-inputs, animal feeds, palm oil manufacturing, dairy, poultry and processed foods. In the crop protection business, the company manufactures products that cater to the entire crop lifecycle including plant growth regulators, organic manures, generic agrochemicals and specialized herbicides.

Financials

Godrej Agrovet had reported a rise of 4.81% in the net profit to Rs 273.53 crore for the financial year ended 31 March 2017 as compared to Rs 260.98 in the last year. While company’s total sales grew by 30.53% to Rs 4,983.3 from last year’s sales of Rs 3817.67 crore.

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