Shivashrit Foods IPO: A Deep Dive into the Potato Flakes Opportunity

The Indian stock market is buzzing with the upcoming Initial Public Offering (IPO) of Shivashrit Foods Limited. As a prominent player in the specialized potato flakes segment, this SME IPO presents an intriguing opportunity for investors looking to tap into the dynamic food processing sector. Let's delve into the details of this offering, understand the company's strengths, and evaluate its potential for growth.

Unpacking the Opportunity: Shivashrit Foods at a Glance

Established in August 2017, Shivashrit Foods Limited has rapidly carved a niche for itself as a manufacturer, supplier, and exporter of high-quality potato flakes. Their state-of-the-art potato processing facility in Aligarh, Uttar Pradesh, is at the heart of their operations, producing premium flakes essential for various food products.

The company's products, marketed under the brands "Shivashrit," "Shreeaahar," and "Flaker’s," cater to a wide array of global and domestic food manufacturers, serving as key ingredients in ready-to-eat meals, snacks, and processed foods. Their commitment to consistent quality and extended shelf life is a hallmark of their offerings.

Shivashrit Foods boasts an impressive reach, with sales across several Indian states including Madhya Pradesh, Uttarakhand, Maharashtra, Punjab, Gujarat, Haryana, Delhi, Rajasthan, Uttar Pradesh, West Bengal, and Bihar. Beyond domestic borders, they have a growing international presence, exporting to countries like Argentina, Brazil, Chile, Dubai, Indonesia, Israel, Kuwait, Lebanon, Malaysia, Mexico, Turkey, Uruguay, USA, Kosovo, and Bangladesh.

Operational Excellence and Competitive Edge:

• Experienced Leadership: The company benefits from a seasoned team of promoters and management, guiding its strategic direction and operational efficiency.
• Robust Supply Chain: An efficient supply chain network supports strong, long-standing relationships with customers.
• Advanced Manufacturing: Their Aligarh facility is equipped with modern machinery and technology, ensuring high standards of quality and efficiency in potato flake production.
• Strategic Location Benefits: The prime location for potato procurement and storage in Aligarh provides advantages from government policies, incentives, and subsidies for food processing units.
• Certified Quality: The manufacturing unit holds prestigious certifications including FSSAI, ISO 22000:2018, HALAL, BRCGS from Intertek (UKAS certified), and USFDA, underscoring their commitment to international quality standards.

Key Details of the Initial Public Offering

The Shivashrit Foods IPO is structured as a book-built issue, combining a fresh issuance of shares and an offer for sale by existing shareholders. Here’s a quick overview of the essential details:

The Journey Ahead: IPO Timeline Visualized

For prospective investors, understanding the IPO timeline is crucial for planning your application and tracking its progress. Here’s the tentative schedule for Shivashrit Foods IPO:

Investment Tiers: Understanding Lot Sizes

The Shivashrit Foods IPO is an SME IPO, which means the lot sizes are different from mainboard IPOs. Here’s a breakdown of the minimum and maximum investment requirements for various investor categories:

Note: The maximum investment for Retail Individual Investors is also 2 lots (2,000 shares) amounting to ₹2,84,000, aligning with SME IPO regulations for the retail segment.

Company Financials: A Snapshot of Performance

Examining the financial performance of Shivashrit Foods Limited provides critical insights into its health and growth trajectory. The company has shown a significant revenue and profit growth in recent fiscal years:

Between FY2024 and FY2025, the company's revenue increased by approximately 36.5%, building on an even more substantial growth of nearly 70% from FY2023 to FY2024. Profit After Tax (PAT) also saw a commendable rise of about 3.9% from FY2024 to FY2025, following an exceptional leap of over 660% from FY2023 to FY2024. This consistent growth in top-line and bottom-line figures reflects the company's expanding market presence and operational efficiency.

Evaluating Performance: Key Financial Metrics

A deeper look into Shivashrit Foods' Key Performance Indicators (KPIs) provides further context for its financial standing and valuation. The market capitalization of Shivashrit Foods IPO is ₹259.42 Crore.

These metrics indicate a company with strong profitability and efficient use of capital, as suggested by the high ROE and ROCE. While the Debt/Equity ratio is above 1, it's important to consider industry norms and the company's specific growth plans.

The post-IPO P/E ratio suggests a valuation that factors in future growth potential. Investors should compare these figures with industry peers to gauge relative attractiveness.

Driving the Vision: The Promoter Group

The success of any company is often attributed to its leadership. Shivashrit Foods Limited is promoted by a dedicated team:

• Mr. Prashant Singhal
• Mr. Nishant Singhal
• Mrs. Sunita Singhal
• Mr. Ramesh Chand Singhal

Their collective experience and strategic insights are expected to continue guiding the company's growth trajectory.

Promoter Shareholding:

The significant pre-issue promoter holding indicates strong confidence in the company's future. The post-issue holding will reflect the dilution from the fresh issue of shares.

Purpose of the Issue: What's the Capital For?

The funds raised through this IPO are earmarked for strategic initiatives that will fuel Shivashrit Foods' expansion and operational needs. The company proposes to utilize the net proceeds towards the following key objectives:

• Capital Expenditure for Expansion: A significant portion of the funds (₹26.3 Crore) will be invested in an "Expansion Project" to enhance manufacturing capabilities and capacity.
• Working Capital Requirement: Funds amounting to ₹19.0 Crore are allocated to meet the working capital needs associated with the expansion project, ensuring smooth day-to-day operations.
• General Corporate Purpose: The remaining funds will be utilized for general corporate purposes, providing flexibility for strategic investments, operational contingencies, and other business needs.

These objectives highlight the company's focus on scaling its operations and strengthening its market position.

Strategic Outlook: A SWOT Analysis

Understanding the internal and external factors influencing Shivashrit Foods is crucial for a comprehensive assessment.

Strengths:

• Established market presence with diverse domestic and international customer base.
• Robust manufacturing infrastructure and quality certifications (FSSAI, ISO, HALAL, BRCGS, USFDA).
• Experienced management team providing strategic direction.
• Efficient supply chain ensuring raw material availability and distribution.
• Strategic plant location with governmental incentives for food processing.

Weaknesses:

• Dependence on a single primary raw material (potatoes), making it vulnerable to price fluctuations and supply disruptions.
• SME segment typically faces higher scrutiny and liquidity challenges post-listing compared to mainboard companies.
• High working capital requirements, as indicated by a significant portion of IPO funds allocated for this.
• Potential for intense competition from larger, more diversified food processing companies.

Opportunities:

• Growing demand for processed and convenience foods globally, driven by changing lifestyles.
• Potential to expand product portfolio beyond potato flakes to other value-added potato or vegetable products.
• Leveraging existing certifications to enter new, highly regulated international markets.
• Increasing government support and incentives for the food processing sector in India.

Threats:

• Volatility in agricultural commodity prices (potatoes) directly impacting input costs and profitability.
• Economic downturns or changes in consumer spending habits on discretionary food items.
• Emergence of new technologies or substitute products that could disrupt the potato flakes market.
• Stricter food safety regulations or trade barriers in export markets.

Navigating the Application Process

Applying for an IPO has become increasingly streamlined, with various options available to investors. Most brokerage platforms offer a seamless online application experience.

You can typically apply for an IPO using either the UPI (Unified Payments Interface) method or ASBA (Applications Supported by Blocked Amount) via your net banking portal.

Applying through a Popular Brokerage Platform (e.g., Zerodha):

Many investors use discount brokers like Zerodha for IPO applications. The process generally involves:

1. Log in to your broker's back office or console.
2. Navigate to the 'IPOs' section.
3. Find the specific IPO (e.g., Shivashrit Foods IPO) and click the 'Bid' or 'Apply' button.
4. Enter your UPI ID, the desired quantity of shares (in multiples of the lot size), and the bid price.
5. Submit your application.
6. Finally, approve the mandate request on your UPI payment application (like BHIM, Google Pay, PhonePe, etc.) to block the funds.

Always ensure you have sufficient funds in your linked bank account to avoid application rejection.

Connect & Inquire

For further details or direct communication, here are the key contact details:

Company Contact Information:

• Shivashrit Foods Ltd.
  Gopal Ganj, Sarai Lavaria, Aligarh, Uttar Pradesh, 202001
• Phone: +91 571 3500346
• Email: cs@shivashrit.com
• Website: http://www.shivashritfoods.com/

Registrar for the Issue:

The registrar is responsible for managing the IPO application process, allotment, and credit of shares.

• Maashitla Securities Pvt.Ltd.
• Phone: +91-11-45121795-96
• Email: investor.ipo@maashitla.com
• Website: https://maashitla.com/allotment-status/public-issues