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Temasek-backed Godrej Agrovet surges 30% on stock market debut

16 October, 2017

Godrej Agrovet Ltd, the agri-business subsidiary of Godrej Industries Ltd, made a stellar debut on stock exchanges on Monday with its shares gaining 30% to the issue price.

Shares of the company, which is backed by Singapore state investment firm Temasek, began trading on the BSE at Rs 621 apiece compared with the initial public offering price of Rs 460, stock exchange data showed.

The stock touched a high of Rs 629.85 after listing, before falling to a low of Rs 563.80 on debut day.
The stock eventually closed at Rs 595.55 apiece with a market capitalisation of Rs 11,436.27 crore.

On Monday, BSE’s benchmark Sensex ended with 0.62% gains amid a volatile trade. The 30-share scaled a new peak intraday.

Godrej Agrovet’s strong start follows an IPO that received humongous investor turnout and was subscribed 95 times.

The company joins the likes of Capacit’e Infraprojects Ltd, Dixon Technologies and hypermarkets operator Avenue Supermart in attracting investors in droves. The IPO of Capacit’e was covered a record 182 times while Avenue Supermart’s share sale was subscribed 105 times. Contract electronics maker Dixon’s IPO was covered 117 times.

Godrej Agrovet had filed its draft proposal on 19 July and got regulatory approval last month.

The Rs 1,157.31 crore IPO saw a stake dilution of 13.13% on a post-issue basis. It comprised a fresh issue of shares worth Rs 291.51 crore, besides an offer for sale of 6.52 million shares by the parent company worth Rs 300 crore and 12.3 million shares worth Rs 565.80 crore by V-Sciences Investments Pte, the investment arm of Temasek.

Temasek had picked up a 19.97% stake in Godrej Agrovet nearly five years ago for Rs 572 crore. This was the single-largest alternative investment in the agri-business segment in India and valued Godrej Agrovet around Rs 2,860 crore.

Godrej Agrovet’s IPO was the first public offering by a Godrej group company in eight years. In Decmber 2009, Godrej Properties Ltd had gone public with a Rs 500-crore IPO.

Kotak Mahindra Capital Co, Axis Capita and Credit Suisse Securities (India) were the merchant bankers managing the IPO.

Incorporated in 1991, the company is a diversified, research- and development-focused agri-business of the 120-year-old Godrej group. It produces 1.1 million tonnes of feed and nutritional products for dairy cattle, poultry and aquaculture annually. It also has palm oil plantations and makes hybrid seeds.

Godrej Agrovet ranked fourth among India’s animal compound feed producers in terms of sales volume in FY2015-16, according to a report by ratings agency CRISIL. It is also India’s largest crude palm oil producer by market share.

The animal feed business vertical accounted for over 52% of its revenue in FY2016-17. It reported net profit of Rs 273.53 crore in FY2016-17 on total revenue of Rs 4,983.29 crore.

The company’s total revenue stood at Rs 3,817.66 crore in FY2015-16, and at Rs 3325.48 crore in the year-ago period.

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Temasek-backed Godrej Agrovet surges 30% on stock market debut

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