In a press statement, Godrej Agrovet said the company will sell new shares worth Rs300 crore in the initial public offering (IPO). Promoter Godrej Industries Ltd will sell shares worth up to Rs300 crore, while V-Sciences Investments Pte Ltd (a Temasek investment firm) will sell 12.3 million shares. Shares worth Rs20 crore will be set aside for employees.
Kotak Mahindra Capital Co. Ltd, Axis Capital Ltd and Credit Suisse Securities (India) Pvt. Ltd will manage the initial share sale. The proceeds of the IPO will be used for repayment or prepayment of working capital facilities, repayment of commercial papers and general corporate purposes, the statement said.
Godrej Industries FY16-17 annual report says it is the largest shareholder in the company with a 63.7% stake.
The company operates across five business verticals including animal feed—the largest segment—crop protection, oil palm, dairy, and poultry and processed foods.
During FY2015-16, the company also acquired Creamline Dairy, a south India-focused milk and milk products firm along with Astec Lifesciences Ltd, an agri-chemical and pharma intermediates firm, further strengthening the company’s presence across the agri- and food business value chain.
Godrej Agrovet is the leading compound animal feed company in India, on the basis of installed capacity for the financial year 2016, according to the CRISIL Animal Feed report from 2016.
Godrej Agrovet reported a 30.5% year-on-year increase in revenue to Rs4,985 crore in FY16-17, according to the Godrej Industries annual report, while profit before tax was up 12% to Rs375 crore.
Equities brokerage firm Axis Capital has valued Agrovet at Rs7,000 crore, based on estimated earnings for 2017-18.
“With only 10% of the feeds market-organized, along with the kind of 30-40% PAT CAGR the company has been making while operating in a niche business, there is a lot of interest in the issue,” said an analyst with an equities brokerage firm, requesting anonymity.
“Besides, there has not been an IPO from the Godrej group for nearly a decade; the last being Godrej Properties (which went public in 2010),” he said, adding that the calibre of promoters like the Godrej family only makes the issue more attractive to potential investors.