Godavari Biorefineries is a prominent player in the ethanol-based chemicals sector in India, and the company boasts the largest integrated bio-refinery in the country in terms of installed capacity. As one of the largest producers of ethanol by volume in India, Godavari Biorefineries has positioned itself as a leader in the industry. Moreover, it holds the distinction of being the largest manufacturer of MPO (Methanol Phenol Oxygenates) worldwide. The company is also one of only two manufacturers globally producing natural 1,3 butylene glycol, and it is the only company in India manufacturing bio ethyl acetate.

The company's initial public offering (IPO), a book-built issue, is valued at ₹554.75 crore. The IPO includes a fresh issue of 92.32 lakh shares, amounting to ₹325 crore, and an offer for sale (OFS) of 65.26 lakh shares, totaling ₹229.74 crore. This makes it an opportunity for existing shareholders to sell part of their stake while also raising new capital for the company.

IPO Dates and Subscription Details
The subscription window for Godavari Biorefineries IPO opens on October 23, 2024, and closes on October 25, 2024. Investors can expect the allotment to be finalized by October 28, 2024. The listing on BSE and NSE is scheduled for October 30, 2024, giving investors the chance to start trading soon after allotment.

Price Band and Lot Size
The price band for Godavari Biorefineries IPO has been set between ₹334 and ₹352 per equity share. The market capitalization at the IPO price is expected to be around ₹1,801.39 crore. Retail investors can buy a minimum lot size of 42 shares, with the minimum investment amounting to ₹14,784. For High-Net-Worth Individuals (HNIs), the minimum requirement is 14 lots, translating to 588 shares, or ₹2,06,976.

Lead Managers and Registrars
SBI Capital Markets Limited and Equirus Capital Private Limited are the book-running lead managers for the issue, while LINK INTIME INDIA PRIVATE LIMITED is acting as the registrar. These entities will play crucial roles in managing the IPO process, ensuring smooth operations from the application to the allotment stage.

Financial Performance and Valuation
When evaluating the financial performance of Godavari Biorefineries, it’s essential to consider the recent numbers. The company reported revenues from operations of ₹5,252.73 lakh for the three months ending June 30, 2024, while for the full fiscal year 2024, revenues stood at ₹17,010.64 million. In comparison, the revenues for fiscal 2023 and 2022 were ₹20,230.79 million and ₹17,099.76 million, respectively.

The company’s EBITDA for the three-month period ended June 30, 2024, was ₹(94.90) million, reflecting a dip from the previous fiscal years where EBITDA was ₹1,479.35 million in FY24, ₹1,546.16 million in FY23, and ₹1,405.34 million in FY22. Similarly, the Profit after Tax (PAT) for the same three-month period showed a loss of ₹261.06 million. In contrast, the PAT for FY24 stood at ₹122.99 million, down from ₹196.37 million in FY23 and ₹190.97 million in FY22.

Despite these figures, the company’s pre-issue EPS stands at ₹2.93, and post-issue EPS is estimated to be ₹2.40. However, the pre-issue P/E ratio is 120.13x, and the post-issue P/E ratio is 146.66x, both significantly higher than the industry average of 35.54x. These metrics suggest that while the IPO might be fairly priced, it may not provide immediate returns.

Godavari Biorefineries IPO Grey Market Premium (GMP)
As of now, the Grey Market Premium (GMP) for Godavari Biorefineries IPO stands at ₹0. This implies that no significant price discovery is taking place in the grey market, and potential listing gains may be minimal. Investors should exercise caution and avoid relying heavily on grey market speculation when making investment decisions. GMP serves only as an educational tool and is not an indicator of future performance.

Subscription Status and Allotment Process
The Godavari Biorefineries IPO subscription opens on October 23, 2024, and live updates on the subscription status can be accessed through official platforms. Investors can check the allotment status online after October 28, 2024, by visiting the registrar's website. Here’s a step-by-step guide to check the allotment:

Navigate to the IPO allotment status page on the registrar's website.

Select Godavari Biorefineries IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to view your allotment status.

Objectives of the IPO
The proceeds from the fresh issue will be used primarily for the following purposes:

₹2,400.00 million will go towards repayment or pre-payment of outstanding borrowings.

The remaining funds will be used for general corporate purposes.

Final Review and Recommendation
Godavari Biorefineries has a strong market presence in the ethanol-based chemical sector and holds leadership positions in various product categories. However, the company’s financials suggest a cautious approach, as the profit margins have been declining, and the valuation multiples are higher than the industry average. The lack of substantial grey market premium also indicates that this IPO may not yield significant listing gains. Therefore, risky investors may consider avoiding this IPO for short-term listing gains or long-term investment unless they have a high-risk appetite.

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