Godavari Biorefineries Limited manufactures ethanol-based chemicals. It operates an integrated biorefinery with a capacity of 570 KLPD for ethanol production. Godavari Biorefineries IPO intends to raise Rs 554.75 crores. The issue is a combination of fresh issue of Rs 325.00 crores and offer for sale aggregating to Rs 229.75 crores.

About Godavari Biorefineries Limited:

• They currently have two manufacturing facilities, with one manufacturing facility located in the Bagalkot district in Karnataka (the “Sameerwadi Manufacturing Facility”) and another manufacturing facility located in the Ahmednagar district in Maharashtra (the “Sakarwadi Manufacturing Facility”).
• The Sameerwadi Manufacturing Facility is an integrated facility dedicated to the manufacturing of Ethanol, sugar and power, while the Sakarwadi Manufacturing Facility is currently dedicated to the manufacturing of Bio-based Chemicals.
• Their diversified product portfolio comprises of bio-based chemicals, sugar, different grades of ethanol and power. These products find application in a range of industries such as food, beverages, pharmaceuticals, flavours & fragrances, power, fuel, personal care and cosmetics.
• They also market multiple products including sugar, jaggery, salt and turmeric under their r brand name ‘Jivana’ which is distributed through retail stores as well as online retail channels.
• They are a part of the Somaiya group of companies, which has experience of over eight decades in the sugar industry and over six decades in the bio-based chemicals industry. 

Financials : Godavari Biorefineries Limited

Anchors: Godavari Biorefineries IPO

Godavari Biorefineries Ltd, raised over ₹166 crore from anchor investors. Notable participants in the anchor round included HDFC Mutual Fund, Whiteoak Capital Fund, Goldman Sachs (Singapore) Pte Ltd, Societe General, and SBI General Insurance,

Salient Points: Godavari Biorefineries IPO

• Bed chemicals market, driven by the rising demand for environmentally sustainable solutions is valued at USD 97.2 billion in 2023, and is projected to grow at a CAGR of 10.4% from 2023 to 2028.
• From the Rs. 325 cr Fresh Issue proceeds, Rs. 240 cr will go towards debt repayment.
• Rs. 230 cr OFS by investor Mandala Capital (full exit) and promoter whose 81% stake to shrink to 63%.
• They are one of the prominent manufacturers of ethanol based chemicals in India and we have the largest integrated bio-refinery in India in terms of installed capacity.
• They are one of India’s largest producers of ethanol in terms of volume.
• They are also the largest manufacturer of MPO worldwide in terms of installed capacity, one of only two manufacturers of natural 1,3 butylene glycol and the only company in India to manufacture bio ethyl acetate.
• They have also set up India’s first bio-based EVE manufacturing facility in India.
• Peers: Listed industry peers like EID Parry , Triveni Engineering, Balrampur Chini Mills, Dwarkish Sugar Industries look better placed.
• Company claims to have the widest portfolio of bio-based products in India.
• The revenue of is nearly equally between the 3 main product segments.
• Bio-based chemicals segment, clocked low EBITDA margin < 5% over the years and financial performance is not inspiring.
• The offer is made at a P/E of 146 x the FY2024 EPS 
• I am not sure whether to apply in Godavari Biorefineries IPO even though anchor book has attracted many strong names. Prospects may be good but fundamentals look weak and pricing is exorbitant based on current performance. In the long term, there are good chances of  exponential growth of the bio-based chemicals market, driven by the rising demand for environmentally sustainable solutions.
• GMP as reported on social media was around Rs. 15 (4%).
• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.