Temasek Set To Make Threefold Gains On Godrej Agrovet Investments
Godrej Agrovet is looking to raise Rs 1,157 crore through its IPO.
Singapore government’s wealth fund Temasek will make threefold gains as it sells a third of its nearly 20 percent stake in Godrej Agrovet Ltd., India’s largest animal feed maker, in an initial public offering.
Godrej Agrovet will raise up to Rs 1,157 crore by selling 2.52 crore shares at Rs 450-460 in the IPO that opens on October 4. V-sciences Investment Pte., an investment arm of Temasek, had acquired its stake in 2012 at an average cost of Rs 154.6 a share.
Parent Godrej Industries Ltd., which owns 63.67 percent, will sell stake worth Rs 300 crore. The agri-products maker will also issue fresh shares to mop up Rs 291.5 crore to repay short-term loans. In a pre-IPO placement, it raised close to Rs 8.5 crore by offering shares at Rs 440 apiece to certain employees.
Business
Nearly half of Godrej Agrovet’s revenue comes from its animal feed business, followed by dairy and crop protection. It recently acquired Mumbai-based Astec LifeSciences Ltd., which helped the company stem a slowdown due to falling revenues from animal feed business and rising palm oil prices.
Godrej Agrovet also makes plant growth regulators, organic manures, generic agrochemicals and specialised herbicides. And it recently acquired Creamline Dairy Products Ltd. to boost the business, mostly concentrated in South India.
“Integration of new companies into our business needs to happen mush faster than in the past”, managing director BS Yadav told BloombergQuint. That’s because return on equity fell 10 percentage points to 27 percent in the year to March because “we funded our acquisitions worth about Rs 500 crore”, he said.
“We will maintain the same rate of investments as in the past five years,” he said. The company will continue to consider acquisitions to grow, Yadav said.
“Agri-business faces challenges from everything from commodity prices to monsoons. We have built a portfolio of products and businesses to hedge against these events and will continue that to maintain stable profitability,” he said.
