IPO Review-1-Godrej Agrovet-by hit

Company Name	Godrej Agrovet, it was founded in 1991 and is primarily owned by Godrej Industries.
Business	Well Diversified Agri Business company Operating in 5 business verticals namely ·         Animal feed, Position Leading business on basis of installed capacity, in india, manufactured at 35 facilities , distribution network 4000+ Associates Joint Venture with ACI Godrej, Bangladesh,4th largest feed producer. Products cattle feed, poultry feed , aqua feed and specialty feed ·         Crop protection, Position Distribution network 6000+ Associates Acquired a majority equity interest in Astec LifeSciences (ALS) and currently own 56.82%. Products Mabufactures wide range of products that are useful in entire Crop lifecycle. ·         Oil palm Position India is world’s largest palm oil importer so company has good chance of growth ahead in this segment. It Recognized as the ‘Highest Crude Palm Oil Producer in the Country’. Associates Acquired a majority equity interest in Astec LifeSciences (ALS) and currently own 56.82%. Products Produces wide range of products incl. crude palm oil, crude palm kernel oil and palm kernel cake ·         Dairy, and Position 4000 Milk distributors + 3000Milk product distributors+50 Retail Parlors as well as direct sell to institutional customer Associates Operating dairy business through subsidiary, Creamline Dairy Products Sell Milk & Milk products under the brand name of “Jersey” ·         Poultry and processed foods.  Position Diverse customer base like quick service restaurants, fine dining restaurants, food service companies and hotels. Associates Entered into a joint venture with Tyson India Holding Limited, a subsidiary of Tyson Foods Inc., U.S.A. Products Manufactures and market processed poultry and vegetarian products under brand name Real Good Chicken’ and ‘Yummiez
Valuation Front	·         Major shareholders OFS + Fresh Issue size: Name Current Share How much sell Post issue share Godrej Industries  68% 6% 63.92% V Sciences 20% 7% 18.6% Total OFS 868 Crore Fresh Issue 292 Crores ·         No promoter holding is pledged ·         Purpose of issue is repayment of working capital loans and commercial paper ·         Positive Cash flow, 5 yr. Avg ROE 33%, + Avg ROCE 41% ·         CAGR 17% (5 yr) ·         The only problem is it’s inventory cycle is 66 days because it has to carry large inventory ·         No suitable listed peer ·         P/E at current price band is 42 & P/B 8.3x
Analysis conclusion	·         Business is based on Agri theme so currently performing well ·         Management is strong ·         Balancesheet improving ·         Valuations are high because of agri business model
Decision	·     Looking at the growth ahead & management & brand name, it’s    worth apply.