InvestorQ : When is the IPO of Godavari Biorefineries likely to hit the IPO market?
Arti Chavan made post

When is the IPO of Godavari Biorefineries likely to hit the IPO market?

Rutuja Nigam answered.
11 months ago

Some IPOs are time and some IPOs are perfectly timed. One such IPO that looks to tap the big shift towards ethanol on petrol blending is the proposed IPO of Godavari Biorefineries. Today, ethanol has become an important commodity with the government getting aggressive about its ethanol blending plans. Godavari Biorefineries, which has already filed DRHP and got SEBI approval is now looking for the right time to launch their IPO.

With Brent Crude prices at closer to $110/bbl, the stock markets are looking favourably at ethanol blenders to fill up the gap in petrol blending. It is in this background that Godavari Biorefineries will be launching its IPO. Godavari Biorefineries got SEBI approval in November 2021 so it is valid up to November 2022. With markets showing signs of returning to normalcy, the company looks all set to announce plans for IPO dates soon.

Meanwhile, the CEO of Godavari Biorefineries clarified that the final call on the timing of the issue would only be taken after evaluating market demand, FPI flows, robustness of Indian economy and the geopolitical situation in Ukraine. In addition, they would obviously also keep an eye on the LIC IPO. After all, the likely demand for LIC IPO from various investor segments will be known mostly by the second week of May, when LIC IPO will be closed.

Just to get into the finer details of the Godavari Biorefineries IPO, it comprise of a fresh issue of Rs.370 crore combined with an offer for sale of Rs.330 crore. The total size of the IPO, therefore, would be around Rs.700 crore. The OFS portion will be purely designed to give an exit to the early investors and promoters as well as to reduce the promoter holding and improve the floating stock of the company ahead of listing.

The fresh issue component will be utilized to expand the ethanol capacity from the current level of 380 kilolitre per day (KLPD) to 570 KLPD. This expansion is likely to be completed by November 2022. Godavari Biorefineries is a major producer of MPO, butylene glycol and ethyl acetate in India. Godavari is the only company in India to produce bio ethyl acetate. It would be a positioning of the risk kind of issue at the right time.