Godrej Agrovet ends at Rs 595, 29% premium against issue price

The stock listed at Rs 621,a 35% premium against its issue price of Rs 460 per share on the BSE.

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.

The stock settled at Rs 595, up 29% vs issue price after hitting a high of Rs 630 on the BSE and NSE in intraday trade. The scrip was down over 4% against its opening price.

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, 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.