Godavari Biorefinaries IPO : Date, GMP and Complete Details
Godavari Biorefineries Ltd (GBL),with its incorporation in 1956, is amongst the largest integrated biorefineries of India. Evolved from being a sugar manufacturing unit to a major player in the bio based chemical and ethanol industry with commitment to sustainability and innovation. Over the past decade, GBL has become a center of focus both for its innovative bio based products and operations and for its involvement in India’s green energy initiatives. This blog digs into GBL’s journey from business operations, financials and more!
Evolution of Godavari Biorefinaries
Sugar Mill to Biorefinery
Godavari Biorefineries began with a sugar mill in the Sangli district of Maharashtra. India’s burgeoning need for sugar — the country’s chief food item — was India’s sugar industry’s one fact written in stone. In those years, however, as the sugarcane business grew, GBL began to branch it out to other lines of businesses. The company recognized that the biorefinery concept had great potential and began producing value added chemicals from the by-products of sugar manufacturing. Today, GBL is a major producer of bio based chemicals, ethanol, and energy products from renewable resources.
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Business Segments and Product Portfolio
Sugar Production: GBL continues to be a core business making sugar of high quality to the domestic and international markets.
Ethanol Production: They are one of the pioneers of ethanol production and supply fuel ethanol to oil marketing companies in India, in line with the Indian government’s Ethanol Blending Program. In addition, it produces ethanol for the beverage and industrial uses.
Bio-Based Chemicals: Backed with chemical engineering, GBL has aspired to make products from bio based chemicals, including acetic acid, ethyl acetate, acetaldehyde, etc. They have applications in almost every sector including pharmaceuticals, flavors and fragrances.
Renewable Power Generation: GBL is powered using a renewable energy technology derived from bagasse (a by-product of sugarcane), enabling it not only augmenting its own energy needs but also assisting India in enhancing the nation’s renewable energy efforts.
GBL’s vertically integrated business model allows it to leverage synergies between its various business segments, ensuring efficient utilization of raw materials and minimal waste production.
Financial Performance
Its resilient business model and its growth potential in green energy and bio based chemical markets is reflected in its financials. Here’s a detailed look at GBL’s recent financials, covering revenue, profitability, cash flow, and debt metrics:
- Revenue and Growth
Over the past few years, GBL’s revenue has grown steadily and steadily, with ethanol and ethanol bio-based chemicals demand growing both. The revenue from operation is on a positive trend with the ethanol segment being the major contributor since it is supported by favorable government policies and concern on sustainable energy alternatives. With sugar, ethanol, and bio based chemicals all offering strong revenue streams well diversified, the cyclicality of the sugar industry is well buffered by the company.
- Profitability Margins
GBL made its measures profitability, including operating profit margin (EBITDA margin), net profit margin, better. Its ethanol and bio-chemical businesses, which have historically posted higher margins than sugar production, drive much, if not most, of this growth. But the company is also impacted by volatility in sugar and ethanol markets. Overall, the sugar business is typically associated with low margins as a result of intense competition and regulatory pricing, but margins are expanded by ethanol and bio based chemicals business.
- Debt and Financing
Like most capital intensive companies, GBL relies on its debt loads to finance its operations and to fund its growth projects. In recent years the company has sought to improve its capital structure and lower its debt levels. Although GBL’s debt to equity ratio has been fairly consistent, the company’s cash flows have picked up from high margin segments and has been comfortable servicing its debt. Additionally, the company has also benefited from government subsidies and green financing and added to its balance sheet.
- Cash Flow and Liquidity
And efficient working capital management and increased profitability has enabled the company to produce positive cash flows from operations. Strong revenue growth, together with margin enhancement, have supported GBL’s consistent and growing cash flow from operating activities. The company has adequate liquidity to fund its growth initiatives, such as investments in ethanol production capacity expansion, as well as in advanced chemical manufacturing.
Factors Impacting Financial Growth
Several factors have contributed to GBL’s strong financial performance in recent years:
Government Initiatives on Ethanol Blending: GBL’s success comes as the Indian government ramps up an effort to include ethanol in petrol. GBL has been able to capitalize on the Ethanol Blending Program, and has opened up a wide revenue stream for itself, by the targeted 20 percent blend by the year 2025. GBL has enjoyed the benefits of increased demand and the good pricing policy.
Demand for Sustainable Products: Demand for bio based chemicals has steadily picked up as companies and consumers take note of the nexus between sustainability. As this growing market calls out for more green chemicals, GBL is poised to fill the gap with its portfolio of green chemicals.
Innovation and R&D Focus: Research and development is where GBL has invested heavily, to further production efficiency and increase the development of new bio based chemicals. These investments have paid off and GBL has a competitive edge allowing it to sell high quality products at a profitable rate.
Competitive Advantage and Market Position
GBL’s vertically integrated model, R&D capabilities and established distribution channel give it a competitive edge over the competition in the biorefinery space. Unlike traditional sugar manufacturers, GBL turned into a diversified player, into high margin businesses, and this helps its profitability. It has built its knowhow on bio based chemicals and ethanol production which makes it a preferred supplier for clients looking for sustainable solutions. Furthermore, GBL dedicated to the quality, sustainability, and the satisfaction of customers earned a long business relationship with clients from different industries.
Godavari Biorefineries IPO
Godavari Biorefineries IPO is a book built issue of Rs 554.75 crores is coming. The issue comprises both Shelf Issue including fresh issue of 0.92 crore of shares advance of Rs 325.00 crores and Offer for sale of 0.65 crore of shares advance of Rs 229.75 crores.
Godavari Biorefineries IPO is From October 23, 2024 to October 25, 2024 close today. The Godavari Biorefineries has slated the allotment for the IPO to be declared on Monday, the 28 th of October in the year of 2024. Godavari Biorefineries IPO will be listed in BSE, NSE with tentative listing date on Wednesday, 30th October 2024.
Goa Based Godavari Biorefineries Ltd has fixed its issue price at ₹ 334 to ₹352 per share. The minimum amount allowed for an application is 42 Shares and above. To become a retail participant, one has to invest a minimum of ₹14,784. For sNII 14 lots worth ₹206,976 and for bNII, 68 lots worth ₹1005312 The minimum lot is 587 shares for value for sNII, and 2,855 for value for bNII.
The directors of the Godavari Biorefineries IPO are as follows: book running lead managers: Equirus Capital Private Limited & SBI Capital Markets Limited while the registrar for the issue is Link Intime India Private Ltd.
Godavari Biorefineries GMP: Godavari Biorefineries IPO last GMP is ₹5, last updated Oct 25th 2024 12:55 PM. With the price band of 352.00, Godavari Biorefineries IPO’s estimated listing price is ₹357 (cap price + today’s GMP).The expected percentage gain/loss per share is 1.42%.
Godavari Biorefinaries IPO Date & Details
IPO Date | October 23, 2024 to October 25, 2024 |
Listing Date | Wednesday,October 30, 2024 |
Face Value | ₹10 per share |
Price Band | ₹334 to ₹352 per share |
Lot Size | 42 Shares |
Total Issue Size | 15,759,938 shares (aggregating up to ₹554.75 Cr) |
Fresh Issue | 9,232,955 shares (aggregating up to ₹325.00 Cr) |
Offer for Sale | 6,526,983 shares of ₹10 (aggregating up to ₹229.75 Cr) |
Issue Type | Book Built Issue IPO |
Listing At | BSE, NSE |
Shareholding pre issue | 41,943,023 |
Shareholding post issue | 51,175,978 |
Godavari Biorefinaries IPO Date and Timeline
IPO Open Date | Wednesday, October 23, 2024 |
IPO Close Date | Friday, October 25, 2024 |
Basis of Allotment | Monday, October 28, 2024 |
Initiation of Refunds | Tuesday, October 29, 2024 |
Credit of Shares to Demat | Tuesday, October 29, 2024 |
Listing Date | Wednesday, October 30, 2024 |
Cut-off time for UPI mandate confirmation | 5 PM on October 25, 2024 |
Godavari Biorefinaries IPO GMP Lot Allotment
Application | Lots | Shares | Amount |
Retail (Min) | 1 | 42 | ₹14,784 |
Retail (Max) | 13 | 546 | ₹192,192 |
S-HNI (Min) | 14 | 588 | ₹206,976 |
S-HNI (Max) | 67 | 2,814 | ₹990,528 |
B-HNI (Min) | 68 | 2,856 | ₹1,005,312 |
Challenges and Risks
Despite its strengths, GBL faces several challenges:
Raw Material Price Volatility: Dependence on raw material – namely sugar cane – puts GBL vulnerable to price volatility of raw material inputs. Government regulates the sugarcane prices and any adverse pricing policy would hit the margins of the company.
Regulatory Risks: Ethanol and sugar production industry is highly regulated, and GBL works in such an environment. The company’s financials could be affected by policy changes, for example, of ethanol pricing or blending mandates.
Competition: With an increased competition both domestic and global, the bio based chemical market is growing. New players could come into the market and exert downward pressure on GBL’s market share and pricing power.
Future Outlook and Growth Vision
Looking ahead, GBL has several growth avenues that could enhance its financial performance and market standing:
- Ethanol Production Expansion
GBL is well positioned to reap the benefits of capacity expansions in ethanol production as the Indian government pushes ahead with the blending of ethanol. Integration of these batteries should result in strong revenue growth as the company plans to ramp up production capacity to serve an expanding market.
- Increased emphasis on high value bio based chemicals
To grow its portfolio of high margin bio based chemicals with broad applications, GBL is now focused. Growing demand for sustainable products provides a promising exit for GBL’s bio based chemicals business.
- Green Energy Initiatives
Bagasse based power generation is found to contribute to the green energy agenda of India. As the demand for renewable energy grows, GBL’s power segment would be able to add significantly to GBL’s revenue and profitability.
- Export Market Expansion Potential
GBL can grow its reach in the global market especially where demand for bio based chemicals is high. To capitalize on these growth opportunities, the company is looking at partnering with, and creating, distribution networks in international markets.
Conclusion
This paper traces the growth of Godavari Biorefineries Ltd, originally a sugar producer, to a market leader in bio-based chemicals and ethanol through systematic innovation and concern for sustainability. In fact there is a clear scope of business development for GBL in the future because it is a diversified company with a secure financial standing in high-margin segments. While addressing risk factors, factors acting as growth drivers are the government policies such as the ethanol blending program, increased demand for Environmentally Sustainable Products.
However, the company’s operation is not without tracking issues like instability of the raw material price, regulation, and competition. With the strengths and opportunities identified above, GBL can create a new and promising business sustainability model in the area of biorefineries, contributing to both the goals India has formulated concerning green energy and the attainment of a more sustainable economy all around the world. The evolution of such an organization is a perfect example of successful management of change, of predicting the future from the aspects of threats that can turn to opportunities. As GBL is gradually diversifying its products and services, it still proves to be an attractive company in the sphere of biorefineries with a great potential.
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FAQ'S
1. What is an IPO ?
Thus, Initial Public Offering (IPO) is a method where public offer of Initial share is floated in the market for the first time. An IPO hence offers a company an opportunity to avail capital from the public investors with help of which it can grow, pay off its debts or enhance operation.
2. What is GMP in the context of IPOs ?
Grey Market Premium (GMP) refers to the preliminary rate of the stocks in the grey market prior to getting a listing on the stock exchange. It shows the interest rate from investors and its likely demand towards the IPO company.
3. Why do companies go public ?
Some of the key reasons that make companies go public include; The need to get capital, increase the entity’s acknowledgment and credibility. The proceeds realized from an IPO are useful for increasing operations, on the acquisition of new projects, or the repayment of current liabilities.
4. Can I sell my IPO shares immediately after allotment ?
In IPO shares, you are allowed to sell the shares after they have been listed on stock exchange markets; however, the time to do so is determined by the listing day which is stated after the allotment has been made.
