Godavari Biorefineries Ltd, a leading producer of ethanol and bio-based chemicals in India, has taken a significant step towards raising capital by filing preliminary papers with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO). The IPO will comprise a fresh issue of equity shares worth Rs 325 crore and an Offer-for-Sale (OFS) of 65.27 lakh equity shares by promoters and an investor, as outlined in the draft red herring prospectus (DRHP).
Private equity firm Mandala Capital AG Ltd, one of the company’s investors, will be offloading 49.27 lakh shares through the OFS route. The proceeds from the fresh issue are earmarked for specific purposes. Approximately Rs 240 crore will be allocated for debt repayment, which will help in improving the company’s financial health and reducing interest burdens. The remaining funds will be used for general corporate purposes, which may include working capital requirements, operating expenses, or other business development activities.
Based in Maharashtra, Godavari Biorefineries is renowned for its diverse product portfolio, which includes bio-based chemicals, various grades of ethanol, sugar, and power. These products cater to a wide array of industries such as food, beverages, pharmaceuticals, flavors & fragrances, power, fuel, personal care, and cosmetics.
The bio-based chemicals market has been experiencing rapid growth, driven by the increasing demand for environmentally sustainable solutions. According to a Frost & Sullivan Report, the market for bio-based chemicals was valued at USD 97.2 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 10.4% from 2023 to 2028. This growth is largely attributed to the shift towards sustainable practices and the need for eco-friendly alternatives in various industries.
Godavari Biorefineries’ entry into the public market is expected to capitalize on this growth trend, enabling the company to expand its operations and strengthen its market position. The IPO will provide the company with the necessary funds to reduce its debt and invest in further growth and development.
The company’s strategic focus on bio-based chemicals aligns with the global movement towards sustainability, positioning it well for future expansion. As the demand for sustainable products continues to rise, Godavari Biorefineries is poised to play a pivotal role in the bio-based chemicals sector, leveraging its expertise and diverse product offerings to meet the needs of a growing market.
