Godrej Agrovet IPO: Brokerage Views & Run up to IPO

Godrej Agrovet Limited
This post on Godrej Agrovet IPO tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, information on Anchor investors, Subscription etc on Godrej Agrovet IPO and shall be updated continuously till the closure of the issue. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Godrej Agrovet IPO or not.

Related Posts: Godrej Agrovet IPO Review: Promising Outlook
Godrej Agrovet IPO: Grey Market Premium etc.

03/10/17 Grey Market Premium Rs. 115-120,  Kostak (Application rate)-  Rs. 500-550

Subscription: Godrej Agrovet IPO  ( x times)
  QIB NII Retail Total
Day 3  150.96  236.04  7.16  95.16
Day 2   1.95 2.06  2.77 2.33
Day 1 0.27 0.1 0.87 0.52
Complete Anchor List:

Anchor Investors (AIs) portion in the Public Issue of Godrej Agrovet Limited 7,417,254 equity shares have been subscribed by 25 Anchor Investors at Rs. 460/- per equity share. Major Anchor Investors in the order of their investment include Government Of Singapore, First State Indian Subcontinent Fund, JP Morgan India Smaller Companies Fund, Russell Investment Company Plc – Russell, Investments Emerging Markets Extended Opportunities Fund, The India Fund Inc, SBI Resurgent India Opportunities Scheme, SBI Magnum Comma Fund, Reliance Capital Trustee Co Ltd – Reliance Top 200 Fund , ICICI Prudential Equity, Income Fund, Birla Sun Life Trustee , Hdfc Small Cap Fund, SBI Life Insurance – Company Ltd, Nomura Funds , Amansa Holdings etc.

Complete List of Anchor Investors Godrej Agrovet IPO

Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on Godrej Agrovet IPO .

Angel Broking: ” At the upper end of the price band (`450-`460), company is asking for a market cap of `8,835cr, at the PE multiple of 33.5x of its FY17 adj. PAT. While there is no exact peer to compare with GAVL’s diversified business, we note that businesses which are present in at least one of the segments of GAVL, trade in a PE multiple range of 22x-57x and ROE profile range of 15%-30%. At 33.5x, GAVL does not appear expensive as PE multiple is in the mid of this range and ROE is at the higher end of the range. We assign a subscribe rating to this IPO considering its diversified business profile, decent margins, strong return ratios, healthy balance sheet and strong history of its parent.”

Ashika Direct
: “GAVL intends tongel Broking use the IPO proceeds to reduce debt and although debt-equity (D/E) ratio for Q1FY18 stands at comfortable 0.67x, it could come further down to 0.34x post issue. At the higher price band of Rs 460, the issue is priced at P/E of 32x FY17 diluted EPS and 29.5x Q1FY18 EPS (annualized). Although, there is no listed peer, however since more than 50% of the revenues are accounted from animal feed business, we compare with Avanti Feeds, which trades at 31x EPS (TTM) and thus the issue appears to be fairly priced. However, considering the strong group, brand image, strong  R&D, market penetration, diversified nature of business and expansion into high margin business, we recommend our investors to“SUBSCRIBE” the issue from a long term perspective.”

Capital Market: ” Score 47/100, At higher price band of Rs 460, the diluted equity share capital of the company works out to Rs 191.66 crore of face value of Rs 10. EPS for FY 2017 works out at Rs 13.6. The P/E on FY 2017 diluted EPS works out to 33.8. There are no listed peers with such a diversified business model. The company is playing major role in all its verticals and is poised for better prospects. The company has grown inorganically in the past and will continue to evaluate inorganic growth opportunities, in keeping with their strategy to grow and develop the market share or to add new product categories, in future as well. “

Choice Broking:  “ On valuation front, GAVL is trading at a FY17 P/E multiple of 38.5x. Considering its diversified product portfolio, brand and growth potential, we feel the demanded valuation is justified that too for a business consistently generating RoE and RoIC of over 20%. Morever, based on FY18E EPS of Rs. 13.6, it is available at a P/E multiple of 33.7x.Thus considering the above observations, we assign a “SUBSCRIBE” rating for the issue.”

Dalal Street Investment Journal: “Company has well-diversified business and belongs to the Godrej group which has strong brand recognition. Operating with such mix portfolio shows the confidence with which company is carrying out its business. It has been generating consistent profits and revenue is growing in double digits from last five years. It will be difficult for any new or existing company to initiate and operate with such diversified portfolio and hence competition would be less tough. All the sectors under which company’s verticals operate have a promising outlook going forward. Considering these positive factors, investors can subscribe to this IPO.”

GEPL Capital: “Godrej Agrovet Limited (“GAVL”) stands to gain from operating leverage. At a P/E of 40.17xs of FY17 earnings. We believe that GAVL has a unique business model and strong growth metrics which will make them lucrative. We assign a Subscribe rating to the IPO.”

The Hindu Businessline: “Focus on profitable businesses and shift to value-added products should lift earnings”  Click Here

KR Choksey: ” During FY17 GAVL reported revenue of INR 49,264 Mn with growth 31.2% YoY, EBITDA during the period was INR 4,380 Mn which grew by 47.7% YoY, in FY17 EBITDA margins stood at 8.9% which increased by 100 bps YoY. PAT during FY17 was around INR 2,735 Mn and PAT margins were 5.6%. Thus with the optimistic view on the company and its financials we rate it ‘SUBSCRIBE’. “

Reliance Securities: “At higher end of the price band of Rs460/share, the Issue is priced at 32.1x FY17 earnings and 27.5x FY18E earnings respectively. Considering the diversified business model, strong management bandwidth, efficient working capital cycle and impressive return ratios coupled with reasonable valuation, we recommend SUBSCRIBE to the Issue.”

Religare Securities: “It has posted Revenue and PAT CAGR of 15.6% and 29.8% respectively over FY13-17 with growth largely from crop protection, oil palm and animal feeds segments. The company has strong distribution network, robust R&D capabilities, large products base and large scale operations spread across India. It is focusing on improving its market share in all the business verticals with strategies like launching new products, cost rationalization, increasing reach in new territories and evaluation of inorganic growth opportunities. At the upper end of the price band of Rs. 460, the stock is valued at ~30x of FY18E annualized earnings, which justifies its diversified business model, management pedigree, strong parentage, healthy balance sheet and positive future outlook.”

SP Tulsiyan Website: “Company is a take on Bharat and particularly, Indian agricultural sector. While the topline growth is healthy, given the size, margins have not expanded as some business or the other keeps facing headwinds (drawback of diverse operations). While crop protection is the cash cow and palm oil clocking high operating margins, domestic animal feed, dairy and poultry lag peers on many counts.Thus, fundamentally, IPO valuations appear fully priced in and Godrej Industries may prove to be better rewarding in the long term.”

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