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Godrej Group's animal feeds unit to sell shares in India IPO

Godrej Industries, Singapore's Temasek to sell part of holdings in Godrej Agrovet.

MUMBAI (NewsRise) -- India's Godrej Group is selling shares in its animal-feeds business to raise as much as 12 billion rupees ($184 million), marking the group's first initial public offering (IPO) in more than seven years.

The Mumbai-based group, which last sold shares in 2010 through an IPO of its real estate business Godrej Properties, is seeking to benefit from a boom in India's primary market.

According to data from Prime Database Group, about 539 billion rupees worth of IPOs and follow-on offerings for this financial year are awaiting approval from the market regulator.

The other major listed company from the Godrej stable is the flagship Godrej Consumer Products that makes Cinthol soaps and Good Knight mosquito repellents that are household names in India.

Godrej Agrovet is selling up to 2.92 million shares in the IPO, while parent Godrej Industries is offloading shares worth up to 3 billion rupees. Singapore's Temasek Holdings, which owns a 20% stake in the company, will sell up to 12.3 million shares through a unit V-Sciences Investments.

The IPO will be open for subscription for three days starting next Wednesday, Godrej said in a statement on Tuesday. The price band of the offering is set at 450 rupees to 460 rupees a share, valuing the company at about 11.5 billion rupees.

In the fiscal year ended in March, Godrej Agrovet reported a 5% increase in net income, while revenue jumped 31%, the company said in a regulatory filing. Its businesses range from animal feed to crop protection, oil palm, dairy, and poultry and processed foods. The company plans to use a part of the funds raised from the share sale to repay loans.

Kotak Mahindra Capital, Axis Capital and Credit Suisse Securities are the lead managers of the IPO.

India's IPO market has been witnessing robust demand over the past several months. The offerings of insurance companies ICICI Lombard and SBLI Life, a unit of the nation's largest lender State Bank of India, were each oversubscribed more than 3 times this month.

A large part of Godrej Agrovet's business has high penetration in the unorganized sector, "which offers a huge untapped opportunity," ICICI Securities said in a report in July. Still, the business is largely farmer-centric and is susceptible to muted demand if rains are subdued, it said.

Shares of Godrej Industries rose 2.13% in Mumbai trading, while the benchmark S&P BSE Sensex lost 0.08%.

--Dhanya Ann Thoppil

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