Godrej Agrovet is in businesses such as agri-inputs, animal feeds, palm oil manufacturing, dairy, poultry and processed foods. (Image: Reuters)
Godrej Industries agri-business company Godrej Agrovet Rs 1,200 crore IPO will open on 4 October, Wednesday. This will be the first public offer of Godrej group in 8 years, it will remain open for three days, starting from 4 October to 6 October. The company had filed draft red herring prospectus (DRHP) with Sebi 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 to know about the share sale.
IPO details
Godrej Agrovet public issue comprises a fresh issue of shares worth Rs 300 crore besides an offer for sale of scrips of up to Rs 300 crore by Godrej Industries and up to 1.23 crore shares by V-Sciences, as per the DRHP. Kotak Mahindra Capital Company, Axis Capital and Credit Suisse Securities (India) Pvt Ltd 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”.
Pre-IPO placement
Besides, 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.
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. The company is expected to garner an estimated Rs 1,000-1,200 crore through the initial public offer.
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.
