The Shivashrit Foods IPO witnessed its market debut on the NSE SME platform with much anticipation from investors. The shares opened at ₹148.50, representing a 4.6% premium over the upper price band of ₹142 per share. However, despite the positive listing, the stock hit the lower circuit soon after debut, highlighting the volatility that often accompanies SME IPOs.

The company had launched its ₹70.03 crore IPO, structured as a Book Built Issue, consisting of a fresh issue of 43.16 lakh shares worth ₹61.29 crore and an offer for sale of 6.16 lakh shares aggregating to ₹8.75 crore. The subscription period ran from 22nd August 2025 to 26th August 2025, with the IPO being subscribed 2.76 times on the final day. The allotment was finalized on 28th August 2025, and the listing date was set for 1st September 2025.

The IPO had a price band of ₹135 to ₹142 per share, with a lot size of 1,000 shares. Individual retail investors were required to invest in a minimum of 2 lots (2,000 shares), which amounted to ₹2,84,000 at the upper end of the price band. The market capitalization at the IPO price of ₹142 per share stood at ₹259.42 crore.

Anchor Investors and Grey Market Premium

Prior to the issue opening, Shivashrit Foods raised ₹19.92 crore from anchor investors by allotting 14,03,000 equity shares at ₹142 per share. This anchor book participation reflected institutional confidence in the company’s fundamentals. Interestingly, the Grey Market Premium (GMP) for the IPO was reported at ₹0, showing no speculative premium before the listing. Market experts highlighted that GMP is highly unorganized and depends on demand-supply, hence should not be treated as a true indicator of listing performance.

Company Overview

Founded in 2017, Shivashrit Foods Limited is a leading manufacturer and exporter of premium-quality potato flakes, operating from Aligarh, Uttar Pradesh. The company runs a dedicated processing and manufacturing facility, which initially had an installed capacity of 14.4 MT/day and was later expanded to 28.8 MT/day in July 2023.

The facility is certified by FSSAI, ISO 22000:2018, HALAL, BRCGS (Intertek UKAS), and USFDA, ensuring compliance with both domestic and international food safety standards. Potatoes, the primary raw material, are procured from farmers, traders, and suppliers within a 200 km radius of the plant. Around 80–90% of raw material requirements are procured during the harvest season (December–March) and stored in integrated cold storage facilities.

The production line is fully automated, covering processes like washing, peeling, slicing, blanching, cooking, mashing, drum drying, and flaking. The finished product is rigorously tested for moisture content, texture, rehydration quality, nutrition, and microbiological safety before being packed in vacuum-sealed HDPE bags to ensure freshness.

Shivashrit Foods primarily operates on a B2B model, supplying potato flakes to food and snack manufacturers both domestically and internationally. Its products are used in instant mashed potatoes, soups, sauces, gravies, bakery items, and snack foods. Recently, the company entered the B2C retail space, launching its brand through Delhi NCR and metropolitan cities, targeting consumers via e-commerce platforms like Amazon, Flipkart, and Meesho.

Industry Landscape

The Indian food processing sector has become one of the fastest-growing industries, supported by rising consumer demand and government initiatives. Contributing around 10.54% to GVA in manufacturing and 11.57% in agriculture, the sector is projected to grow significantly, with the food processing market expected to reach US$ 1,274 billion by 2027, compared to US$ 866 billion in 2022.

Potatoes, being one of the top three staple vegetables in India, are vital for processed food applications. According to government estimates for FY 2024–25, potato production is projected at 59.57 million tonnes, marking a 4.4% increase over the previous year. This provides a strong base for companies like Shivashrit Foods, which heavily rely on potato availability for sustained growth.

Business Strengths

Shivashrit Foods has several competitive strengths:

1. Experienced Promoters and Management Team – The company is led by promoters with more than 15 years of experience in the potato processing business.

2. Efficient Supply Chain – Integrated procurement and cold storage ensure year-round production capacity.

3. Advanced Manufacturing Facility – Equipped with state-of-the-art automation and international certifications.

4. Strategic Location – Aligarh offers proximity to potato farmers, reducing transportation costs and ensuring quality.

5. Expansion into B2C segment – Launch of consumer brands increases brand visibility and revenue diversification.

Future Business Strategy

The company plans to:

• Expand capacity with a new plant, targeting a total capacity of 82 MT/day.

• Strengthen its B2C retail segment, improving brand visibility and consumer engagement.

• Build stronger supplier partnerships with farmers, ensuring raw material stability.

• Leverage demand from the ready-to-eat (RTE) segment, which is rapidly expanding due to urban lifestyles.

IPO Objectives

The proceeds of the IPO will be utilized for:

• ₹26.3 crore for capital expenditure towards construction, machinery, utilities, and plant expansion.

• ₹19 crore for working capital requirements.

• Remaining funds for general corporate purposes.

Risks and Concerns

Despite the growth potential, Shivashrit Foods faces certain risks:

• Customer concentration – Dependence on a few key clients.

• Supplier dependency – Heavy reliance on limited suppliers for potato procurement.

• Product concentration – Over-dependence on a single product, potato flakes, makes the company vulnerable to changes in demand and raw material fluctuations.

In conclusion, the Shivashrit Foods IPO listing was met with both optimism and caution. While the stock managed to debut at a 4.6% premium, the immediate fall to the lower circuit reflects investor profit-booking and market volatility. Backed by strong fundamentals, expansion plans, and entry into the consumer segment, the company is well-positioned for long-term growth, though investors must be mindful of concentration risks and raw material dependencies.

The Upcoming IPOs in this week and coming weeks are Vashishtha Luxury Fashion, Karbonsteel Engineering, Sharvaya Metals, Austere Systems, Optivalue Tek Consulting, Vigor Plast India, Goel Construction Company.

The Current active IPO are Amanta Healthcare, Rachit Prints, Abril Paper Tech, Sneha Organics, Sugs Lloyd, Oval Projects.

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