India: Godrej Agrovet looking at $1.27b valuation in IPO

Photo: Godrej Agrovet website

About 50 Godrej group employees have bought shares worth around $1.5 million (Rs8.5 crore) in a so-called pre-initial public offering (IPO) round of Godrej Agrovet Ltd, two people aware of the development said. The pre-IPO round saw employees from various group firms including Godrej Consumer Products Ltd, Godrej Properties Ltd, Nature’s Basket, Godrej Tyson Foods and Godrej and Boyce Manufacturing Co. Ltd, the people cited above said.

“Ahead of filing its red herring prospectus (RHP) with the registrar of companies, Godrej Agrovet Ltd closed a pre-IPO round wherein several of the group’s senior employees have bought shares worth close to $1.5 million,” said one of the two people cited above, requesting anonymity. The company filed its RHP on Friday, the person added.

“Senior group employees who invested in the pre-IPO round include Godrej Consumer Products managing director Vivek Gambhir, Nature’s Basket managing director Avani Davda and Godrej and Boyce president Anil Verma,” the person said.

According to the second person cited above, the company sold shares to group employees at a price of Rs440 per share.

“The company has fixed the upper end at Rs440 per share for the IPO, which is expected to launch in the first week of October,” he said. At Rs440 a share, the company is seeking a valuation of Rs8,145 crore (approximately $1.27 billion), he added.

The Godrej Agrovet IPO will be worth Rs832 crore at this price. The IPO comprises fresh issue of shares and secondary offering of shares worth Rs541 crore by Temasek.

In an earlier draft prospectus, Temasek had disclosed that it would be selling 12.3 million shares as part of the IPO. Temasek currently owns 20% stake in the company.

“As disclosed in the Red Herring Prospectus dated 22 September, 2017 filed with the Registrar of Companies, Mumbai, our company has, in consultation with the BRLMs, issued and allotted 192,901 equity shares for cash consideration aggregating to Rs8.5 crore through a private placement to the identified employees of certain of our Group Companies and Joint Ventures,” said a spokesperson for Godrej Agrovet in an email response.

The company did not respond to queries on IPO pricing and valuation, citing silent period ahead of its IPO.

Mint reported on 15 September that several firms such as Godrej Agrovet, IEX and Mahindra Logistics were planning to launch their initial share sales in October.

Godrej Agrovet plans to raise Rs300 crore in primary capital through the IPO, which it plans to use for repayment of working capital facilities it availed, and for repayment of commercial papers issued by it, according to its draft prospectus.

The firm operates across five business verticals—animal feed, crop protection, oil palm, dairy, and poultry and processed foods. In fiscal 2017, animal feed contributed the largest share to revenue at Rs2,620 crore, followed by dairy, which contributed Rs1,009 crore.

Godrej Agrovet reported a revenue of Rs4,983.2 crore in 2016-17, up from Rs3,817.6 crore reported in the previous financial year. It reported a profit of Rs273.9 crore in 2016-17, compared to a profit of Rs260.9 crore in the previous year.

Godrej Agrovet is not the only company to raise a pre-IPO round this year.

On 7 September, Mint reported that Sequoia Capital-backed Prataap Snacks Pvt. Ltd, which sells potato chips and a variety of spicy savouries under the brand name Yellow Diamond, raised Rs50 crore in a pre-IPO round from public markets investor Malabar Investments.

Earlier in August, Dixon Technologies (India) Ltd saw a pre-IPO round wherein several investors, including Steadview Capital and GMO Emerging Domestic Opportunities Fund, bought shares worth Rs123.6 crore from existing investors. Dixon went public earlier this month.

This article was first published on Livemint.com

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.