The initial public offering (IPO) of Godavari Biorefineries Ltd., which manufactures ethanol-based chemicals in India, opens for subscription on October 23. The three-day bidding will close on October 25, 2024.

The company will raise funds from anchor investors on Tuesday, October 22.

The company has fixed the price band between ₹334 to ₹352 per equity share. Investors can bid for one lot of 42 shares and then in multiples of 42.

At the upper end of the price band, the company intends to raise ₹554.75 crore, which includes a fresh issue of 0.92 crore shares aggregating to ₹325 crore and offer for sale of 0.65 crore shares aggregating to ₹229.75 crore.

Private equity firm Mandala Capital AG will exit the company, selling its entire stake of 49,26,983 shares in the OFS.

Godavari Biorefineries will have a post-listing market capitalisation of ₹1,801 crore at the upper end of the price band.

As much as 50% of the offer has been set aside for institutional investors, while 15% of the issue is reserved for non-institutional investors. Nearly 35% of the offer is kept aside for retail investors.

The net proceeds from the fresh issue will be used towards repayment of certain outstanding borrowings availed by the company; and general corporate purposes. Proceeds from the OFS will go to the selling shareholders.

Godavari Biorefineries supplies products to leading companies including Hershey India, Hindustan Coca-Cola Beverages, and LANXESS India, among others.

The company operates an integrated biorefinery with a capacity of 570 KLPD for ethanol production.

The company’s product portfolio includes bio-based chemicals, sugar, various grades of ethanol, and power. These products are used in industries such as food, beverages, pharmaceuticals, flavours and fragrances, power, fuel, personal care, and cosmetics

On the earnings front, the company has faced challenges. Its profit declined to ₹12 crore for the year ended March 2024, down from ₹19.6 crore the previous year, while revenue dropped to ₹1,686.7 crore from ₹2,014.7 crore. For the June 2024 quarter, the company posted a loss of ₹26.1 crore on revenue of ₹522.5 crore.

Equirus Capital Private Ltd. and SBI Capital Markets Ltd. are the book running lead managers of the Godavari Biorefineries IPO, while Link Intime India Private Ltd. is the registrar.

The allotment of shares for the Godavari Biorefineries IPO is expected to be finalised on October 28, while the issue will list on BSE, NSE with tentative listing date fixed as October 30, 2024.