Indian feed player Godrej Agrovet going down IPO route

By Jane Byrne

- Last updated on GMT

© Getty Images/Venimo
© Getty Images/Venimo

Related tags Milk Dairy

Indian feed producer, Godrej Agrovet, has set a price range of 450-460 rupees a share for its initial public offering (IPO) to raise up to 11.6 billion rupees (US$177.6m), according to a public notice published today.

The company, which is the agribusiness unit of Godrej Industries, is looking to raise capital through the IPO to use for repayment of working capital facilities and for general corporate purposes, subject to the applicable laws, according to its draft prospectus.

A diversified, research and development focused agri-business company, Godrej Agrovet has operations across five divisions. 

The company has an animal feed business, one of the largest in India, with over a million tons of compound feed sold per annum, targeting the cattle, broiler and layer, fish and shrimp, and specialty feed sectors. It has 35 feed production facilities and the products are sold through 4,000 distributors across India.

In its crop protection business, Godrej Agrovet, produces plant growth regulators, organic manures, generic agrochemicals and specialized herbicides. The products are sold in India and in 24 other countries, through distributors. Its palm oil business comprises crude palm oil, crude palm kernel oil and palm kernel cake. The company owns five palm oil mills.

It is also involved in dairy production, and owns nine milk processing units. It sells milk and milk based products in five south India states. In addition, the company produces processed poultry and vegetarian products.

Feed and dairy business

The company’s feed and dairy businesses are robust, according to analysts at Indian business news and online trading publication, MoneyControl.​ “Customer stickiness, strong brand, R&D and pan-India distribution are the drivers of the animal feed business, whereas the dairy business should benefit from the introduction of value-added products and expansion of geographic reach.”

In December 2015, Godrej Agrovet became the majority stakeholder of Creamline Dairy.

The two entities run dairy farming targeted educational initiatives.

"We are leveraging best of both worlds in terms of marketing and back-end operations. We have formed a network with farmers and this goes beyond just selling cattle feed and providing marketing support for the milk they produce. We are providing a package of technical inputs, which includes cattle feed, veterinary assistance, training in feeding, breeding and cattle management and hygienic ways of milk production,"​ said P Gopalakrishnan, the CEO of Creamline Dairy Products, last year.

In 2015, Godrej Agrovet set up the Nadir Godrej Centre for Animal Research and Development in Nashik, Maharashtra, said to be one of the first private sector investments in improving the efficiency of animal agriculture in India.  

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