Godavari Biorefineries IPO shares to list today; is it headed for flat a stock market debut?
Godavari Biorefineries is set to debut on the stock market on October 29 with a muted outlook due to a low grey market premium (GMP) and weak investor interest, particularly from non-institutional investors (NIIs). The IPO was oversubscribed 1.83 times, mainly due to demand from qualified institutional buyers (QIBs). Godavari Biorefineries, a 1956-founded company, produces bio-based chemicals, sugar, ethanol, and power for various sectors. Mixed analyst recommendations suggest a cautious approach for potential investors.
Shares of Godavari Biorefineries are set to make its Dalal Street debut on Wednesday, October 29 and the ethanol player is to make a muted listing at the bourses, if one goes by the current grey market premium. However, the company has been losing its ground in the unofficial market, following a lean-bidding for the issue.
Grey market premium (GMP) of Godavari Biorefineries saw a sharp correction following a muted response from investors. Ahead of its debut, the company was commanding a premium of Rs 5 in the unofficial market, suggesting a listing pop of merely one per cent for the investors. The GMP stood at Rs 15-20 when the issue opened for bidding.
The IPO of Godavari Biorefineries ran for bidding between October 23 and October 25. It had offered its shares in the fixed price band of Rs 334-352 per share with a lot size of 42 shares. The company raised a total of Rs 554.75 crore from its IPO, which included a fresh share sale of Rs 325 crore and offer-for-sale (OFS) of up to 65,26,983 equity shares.
The issue was overall subscribed merely 1.83 times, thanks to the last-minute interest from qualified institutional bidders (QIBs), whose quota was booked 2.76 times. The allocation for retail investors was booked 1.71 times. The portion for non-institutional investors(NIIs) was undersubscribed at 90 per cent only during the bidding process.
Incorporated in 1956, Godavari Biorefineries manufactures ethanol-based chemicals in India. The Mumbai-based 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.
Brokerages had mixed views on the issue with some suggesting to subscribe to it, while others avoided it. Equirus Capital and SBI Capital Markets were the book running lead managers of the Godavari Biorefineries IPO, while Link Intime India was the registrar for the issue.
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