Godrej Agrovet IPO subscribed 52 times on Day 3
, ETMarkets.com|
Updated: Oct 06, 2017, 03.26 PM IST
NEW DELHI: The Rs 1,157-crore initial public offer (IPO) of Godrej Agrovet (GAVL) was subscribed 51.84 times times on the final day of bidding process on Friday.
The public offer received bids for 93,46,26,304 shares against 1,80,27,464 shares offered by the company by the end of the session on Friday.
The offer was subscribed 2.37 times on day two of the bidding process on Thursday while it had been subscribed over 52 per cent on the first day of the bidding process on Wednesday.
The quota limit for qualified institutional buyers (QIBs) was subscribed 122.50 times, non-institutional investors (NIIs) 164.55 times and retail investors 6.37 times.
On Tuesday, the company allotted 74.17 lakh shares to 25 anchor investors including Reliance Capital Trustee Company, SBI Life Insurance Company, Nomura, Goldman Sachs, Government of Singapore, among others, at Rs 460 apiece.
Godrej Industries owns 60.81 per cent stake in Godrej Agrovet and intends to use the IPO proceeds towards loan repayments and other general purposes.
The company is the largest palm oil producer in India. It's joint venture in Bangladesh is the fourth largest feed producer in terms of sales volume.
Analysts have said given the strong fundamentals and market share the company enjoys, the issue is a 'Subscribe'. Buy at cut off price, brokerage advised retail investors.
IIFL Investment Managers, which have a subscribe rating on the issue, said that the company has successfully reaped the rewards of astute business integration. Its synergies across various businesses drive growth, optimise capital efficiency and define its competitive edge, it said.
"GAVL has made strategic acquisitions and joint ventures including Aztec LifeSciences and Creamline Dairy, enabling it to consolidate its market position in existing business verticals through synergy benefits, product portfolio expansion, technological advancement and enhanced sales and distribution network. Thanks to extensive procurement, sales and distribution network and strong brand recall, GAVL has gained enviable market share," it said.
In four years to FY17, the company’s top line and bottom line grew at a compounded annual growth rate of 12.2 per cent and 27.3 per cent respectively.
"At the price band of Rs. 450-460, the issue is priced at 34-34.7 times of its FY17 earnings, whereas it is available at 18-18.4 times FY17 EV/EBITDA. For FY17, the pre-issue return on equity and return on capital employed stood at 28.4 per cent and 28.9 per cent respectively. We recommend investors to subscribe the issue at cut-off price," SBICap Securities said in a note.
ICICIdirect.com says that GAVL is available at market cap to sales ratio of 1.8 times on FY17 basis.
It possess healthy balance sheet with net debt to equity ratio of 0.6, average net working capital days of nearly 30 and robust return on equity at 28 per cent. The brokerage recommended a subscribe rating on the issue.
The public offer received bids for 93,46,26,304 shares against 1,80,27,464 shares offered by the company by the end of the session on Friday.
The offer was subscribed 2.37 times on day two of the bidding process on Thursday while it had been subscribed over 52 per cent on the first day of the bidding process on Wednesday.
The quota limit for qualified institutional buyers (QIBs) was subscribed 122.50 times, non-institutional investors (NIIs) 164.55 times and retail investors 6.37 times.
On Tuesday, the company allotted 74.17 lakh shares to 25 anchor investors including Reliance Capital Trustee Company, SBI Life Insurance Company, Nomura, Goldman Sachs, Government of Singapore, among others, at Rs 460 apiece.
Godrej Industries owns 60.81 per cent stake in Godrej Agrovet and intends to use the IPO proceeds towards loan repayments and other general purposes.
The company is the largest palm oil producer in India. It's joint venture in Bangladesh is the fourth largest feed producer in terms of sales volume.
Analysts have said given the strong fundamentals and market share the company enjoys, the issue is a 'Subscribe'. Buy at cut off price, brokerage advised retail investors.
IIFL Investment Managers, which have a subscribe rating on the issue, said that the company has successfully reaped the rewards of astute business integration. Its synergies across various businesses drive growth, optimise capital efficiency and define its competitive edge, it said.
"GAVL has made strategic acquisitions and joint ventures including Aztec LifeSciences and Creamline Dairy, enabling it to consolidate its market position in existing business verticals through synergy benefits, product portfolio expansion, technological advancement and enhanced sales and distribution network. Thanks to extensive procurement, sales and distribution network and strong brand recall, GAVL has gained enviable market share," it said.
In four years to FY17, the company’s top line and bottom line grew at a compounded annual growth rate of 12.2 per cent and 27.3 per cent respectively.
"At the price band of Rs. 450-460, the issue is priced at 34-34.7 times of its FY17 earnings, whereas it is available at 18-18.4 times FY17 EV/EBITDA. For FY17, the pre-issue return on equity and return on capital employed stood at 28.4 per cent and 28.9 per cent respectively. We recommend investors to subscribe the issue at cut-off price," SBICap Securities said in a note.
ICICIdirect.com says that GAVL is available at market cap to sales ratio of 1.8 times on FY17 basis.
It possess healthy balance sheet with net debt to equity ratio of 0.6, average net working capital days of nearly 30 and robust return on equity at 28 per cent. The brokerage recommended a subscribe rating on the issue.
