Temasek-backed Godrej Agrovet files IPO prospectus

Godrej Agrovet Limited has filed its Draft Red Herring Prospectus (DRHP) with the market regulator SEBI seeking permission for its Initial Public Offering (IPO). Godrej Agrovet IPO will comprise of a fresh issue of up INR300 crore (INR3 billion) in addition to an Offer For Sale (OFS). Godrej Agrovet-promoter Godrej Industries Limited plans to sell shares worth INR300 crore while 12,300,000 shares will be offloaded by Temasek Holdings subsidiary V-Sciences Investments. V-Sciences holds nearly 20% stake in the company while Godrej Industries directly owns just below 64%.

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Godrej Agrovet aims to use IPO proceeds towards repayment or prepayment of working capital facilities, repayment of commercial papers; and for general corporate purposes.

The issue would include a reservation of up INR200 million (INR20 crore) for eligible employees and also proposes to issue up to 405,500 equity shares to identified employees of the company under the ESPS.

The company is a diversified, research and development focused agri-business company and operates across five business verticals viz. animal feed, crop protection, oil palm, dairy, and poultry and processed foods. According to a CRISIL Animal Feed Report, it is the leading compound animal feed company in India, on the basis of installed capacity for the financial year 2016. The company also operates a joint venture in Bangladesh, named ACI Godrej, which was the country’s fourth largest feed producer, in terms of sales volume. Godrej Agrovet is also the largest crude palm oil producer in India.

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Godrej Agrovet IPO will be managed by Kotak Mahindra Capital Company Limited, Axis Capital Limited and Credit Suisse Securities (India) Private Limited while Karvy Computershare Private Limited has been appointed the registrar.

Robust financial performance

The company has made steady progress in expanding its business operations and its top line has grown from INR2,771.6 crore in FY2013 to INR4,983.3 crore in FY2017. In these years, Godrej Agrovet also managed to consistently increase its profits. For the year ended 31 March 2017, Godrej Agrovet posted a profit of INR273.5 crore, translating into a net profit margin of 5%.