Incorporated in 1956, Godavari Biorefineries Limited is one of India’s leading manufacturers of ethanol-based chemicals. The company makes various bio-based chemicals such as ethyl acetate, bio-ethyl acetate, MPO, 1,3 butylene glycol, crotonaldehyde, acetaldehyde, bio-acetic acid and many others. In terms of volume, it is one of India’s largest ethanol producers as of 31 March 2024.
The company has the widest product portfolio in the industry. These products are used in the food, beverages, pharmaceuticals, flavours and fragrances, power, fuel, personal care, and cosmetics industries. The company also markets and distributes products like sugar, jaggery, salt, and turmeric under its brand name ‘Jivana’ through retail stores and online channels.
It has two manufacturing facilities: one in the Bagalkot district in Karnataka, which has a sugarcane crushing capacity of 18,000 TCD and an installed capacity of 600 KLPD for rectified spirits, and another in the Ahmednagar district in Maharashtra with an installed capacity of 117,826.20 MTPA for bio-based chemicals.
Godavari Biorefineries caters to customers in over 20 countries, including Australia, China, Germany, France, Italy, Japan, Kenya, Netherlands, Singapore, United Kingdom, United Arab Emirates, Indonesia and the United States of America. Some of its marquee customers include Hershey, Hindustan Coca-Cola, M/s Karnataka Chemical Industries, M/s Techno Waxchem, LANXESS, IFF Inc., Ankit Raj Organo Chemicals, Escorts Chemical Industries, Khushbu Dye Chem, Privi Speciality Chemicals, Shivam Industries, as well as major oil marketing companies.
The company’s financials have been volatile in the last three financial years. In FY22, revenue stood at ₹1,702 crore, which increased by 18.3% YoY to ₹2,014 crore in FY23. However, revenue dropped to ₹1,686 crore in FY24. Similarly, its net profit declined from ₹19 crore in FY22 to ₹12.2 crore in FY24. However, the Indian ethyl acetate market is expected to grow at a CAGR of 9% between 2023 and 2028, which could indirectly benefit the company.
Now, Godavari Biorefineries Limited is launching its initial public offer (IPO). The total IPO issue size is ₹554.7 crore, comprising fresh issue, aggregating to ₹325 crore, and an offer for sale, aggregating to ₹229.7 crore. The money raised from the fresh issue will be utilised to repay borrowings and general corporate purposes. Its shares will be listed on the NSE and BSE.
| Company Name | Godavari Biorefineries India Limited |
|---|---|
| Company Type | Private |
| Company Established | 1956 |
| Godavari Biorefineries India IPO Open Date | 23rd October 2024 |
| Godavari Biorefineries India IPO Close Date | 25th October 2024 |
| Godavari Biorefineries India IPO Allotment Status | 28th October 2024 |
| Credit of Shares to Demat | 29th October 2024 |
| Godavari Biorefineries India IPO Listing Date | 30th October 2024 |
| Godavari Biorefineries India IPO Face Value | ₹10 per share |
| Godavari Biorefineries India IPO Lot size | 42 shares |
| Godavari Biorefineries India IPO Issue Size | Approx ₹554.7 crore |
| Godavari Biorefineries India IPO Listed at | BSE, NSE |
| Godavari Biorefineries India IPO Price | ₹334 – ₹352 per share |
Financial snapshot
| ₹ crore | FY22 | FY23 | FY24 | Q1 FY25 |
|---|---|---|---|---|
| Income | 1702 | 2014 | 1686 | 522 |
| Net profit | 19 | 19.6 | 12.2 | -26.1 |
Strengths
- One of the largest ethanol producers in terms of volume, having set up India’s first bio-based EVE manufacturing facility as of 31 March 2024.
- Integrated bio-refinery in India with an installed capacity of 570 KLPD for manufacturing ethanol as of FY24 that uses sugarcane as a primary raw material.
- The company has a diversified product portfolio and well-established relationship with a diversified marquee customer base across industries and geographies.
- Has offices in Hoofddorp (Netherlands) and Philadelphia (United States of America), which enables it to assess international demand and increase its customer outreach.
- Well-developed in-house research and development capabilities with 3 R&D facilities - two located in its manufacturing facilities and one in Navi Mumbai, Maharashtra.
- Member of the Somaiya group, which has diversified interests in biorefinery, agricultural research, education and healthcare industries.
Risks and threats
- Derives a majority of its revenue from its top 5 customers, accounting for 45% of its revenue from operations in FY24.
- Any shortage of sugarcane, molasses, and feedstock may adversely affect its operations. In FY24, sugarcane accounted for 59% of its total material cost, followed by feedstock at 40%.
- Its sugar, distillery and cogeneration segments are subject to seasonal vagaries, adversely affecting its business and finances.
- Had a debt-to-equity ratio of 2.74, 2.96, 2.55, and 3.01 as of FY22, FY23, FY24, and Q1 FY25, respectively.
- Had total outstanding borrowings of ₹748 crore as of 30 June 2024, subjecting it to restrictions.
- The biochemical industry is capital-intensive, so it might need to seek additional financing in the future to support its growth strategies.
You can now apply for the Godavari Biorefineries Limited IPO on Upstox. Click here.