Godrej Agrovet lists at Rs 621, 35% premium against issue price

Godrej Agrovet made a strong debut by listing at Rs 621, a 35% premium against its issue price of Rs 460 per share on the BSE. On the National Stock Exchange (NSE), the stock opened at Rs 616, 34% higher against issue price.

At 10:04 AM; the stock was trading at Rs 608 after hitting a high of Rs 630 on the BSE and NSE. A combined 6.33 million shares changed hands on the counter on both the exchanges so far.

The Rs 1,170-crore initial public offer (IPO) of Godrej Agrovet saw 95 times more demand than shares on offer. The institutional portion of the issue was subscribed 151 times, while the non-institutional category comprising high net-worth individuals (HNIs) was subscribed 236 times. The retail investor portion was subscribed 7.67 times.

Godrej Agrovet is a leading player in the animal feed segment and it also has a presence across segments, including the crop protection, palm oil, dairy and poultry businesses. The price band for the offering was fixed at Rs 450-460 per share.

IPO proceeds are expected to be gainfully utilized in lowering working capital loans and repaying issued commercial papers, which would lead to higher profitability in the coming future, IIFL Investment Managers said in a note.

Godrej Agrovet Share Price, part of the $4.6 billion consumer conglomerate Godrej group, is a diversified, R&D focused, agri-business player with operations spread across five business verticals - animal feed, crop protection, oil palm, dairy, and poultry and processed foods.

"On valuation front, Godrej Agrovet is trading at a FY17 P/E multiple of 38.5x. Considering its diversified product portfolio, brand and growth potential, we feel the demanded valuation is justified that too for a business consistently generating RoE and RoIC of over 20%," Choice Institutional Research said in IPO note.

REUTERS - Animal feed producer Godrej Agrovet Ltd's shares surged as much as 37 percent on market debut on Monday after an initial public offering of about $179 million.

Godrej Agrovet stock jumped to as much as 630 rupees from its IPO price of 460 rupees after raising 11.6 billion rupees in the IPO that was subscribed over 95 times earlier this month.

Analysts at Angel Broking have given the stock a "subscribe" rating, considering the company's diversified business profile, decent margins, strong return ratios, healthy balance sheet and strong history of its parent.

Besides its main animal feed business, Godrej Agrovet is into crop protection, oil palm, dairy and poultry, as well as processed foods.

Indian companies have so far raised around $8 billion in IPOs this year, and look set to surpass the record $8.65 billion raised in 2007.

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