The agri-business arm of Godrej Industries Ltd., Godrej Agrovet Ltd will open its IPO issue for public subscription on October 4 until October 6. It is the first IPO issue from the group in eight years time. Know should you subscribe to the issue, here.
Issue details: The 1157 crore IPO issue will see sale of as many as 18.82 million shares both from the investors and promoters of the company. Of which, promoter of the company will sell shares of the company worth Rs. 300 crore and the remaining fresh share issue will total to Rs. 291.5 crore. The price band for the issue has been decided at Rs.450-460.
Another 1.23 crore shares will be offloaded by Temasek Holdings unit which at the upper price of the band will garner Rs. 566 crores.
Lead managers to the issue are Credit Suisse Securities (India), Axis Capital and Kotak Mahindra Capital.
Investor can make bids for a minimum of 32 shares and in multiples of 32 thereafter.
Ahead of the IPO issue, the company raised a substantial Rs. 341 crores from 25 anchor investors which would be allotted a total of 74.17 lakh shares.
Objective: From the OFS, the company will not receive any amount. The amount mopped up from fresh issue of shares shall be utilized by the company for repayment or prepayment of working capital facilities, repayment of commercial papers issued by the company, and to meet general corporate purposes.
Financials: The revenue and profits for the fiscal year 2016-17 stood at Rs 4,983.5 crore and Rs.274.4 crore respectively. Sales also grew 30.53% to Rs. 4983.3
Valuations: The issue is priced at a price to earnings multiple of 36.6 times considering the price band of Rs. 450-Rs. 460.
Conclusion: Being a diversified company with presence in well-positioned segments, analysts give a thumbs up to the issue on a long term perspective as the company is expected to create substantial value going forward.