Swasth Foodtech India specializes in premium edible rice bran oil, offering an optimal fat balance, high smoke point, and rich antioxidants, making it an ideal choice for manufacturers and packers. The company also markets sustainable byproducts like fatty acids, gums, spent earth, and wax, contributing to the company's commitment to environmental sustainability.

Swasth Foodtech India has launched an IPO of ₹ 14.92 Crores, with a Fresh Issue of 15.88 Lakh shares. The IPO subscription period runs from February 20, 2025 to February 24, 2025, with the allotment date expected to be February 25, 2025, and the listing date on February 28, 2025, on the BSE SME platform.

IPO Key Details:

• Share Price: ₹94 per equity share
• Market Capitalization: ₹55.06 Crores
• Lot Size: 1,200 shares
• Retail Investment: Minimum of ₹1,12,800 (1 lot)
• HNIs Investment: Minimum of ₹2,25,600 (2 lots)

Financial Highlights:

Swasth Foodtech India has shown consistent growth, with Revenues for FY24 at ₹8,863.21 Lakh, and Profit After Tax (PAT) of ₹182.94 Lakh. The company’s EBITDA for FY24 stands at ₹348.44 Lakh, indicating strong profitability. Despite these positive signs, the Grey Market Premium (GMP) is reported as ₹0, suggesting a neutral market sentiment around the IPO.

Objectives of the IPO:

The proceeds from the IPO will be allocated to:

1. Setting up a packing line at the existing manufacturing unit (₹329.87 Lakhs).
2. Funding working capital requirements (₹750.00 Lakhs).
3. General corporate purposes (₹220.00 Lakhs).

Key Metrics:

The pre-issue EPS stands at ₹5.03, while the post-issue EPS is ₹3.30 for FY24. The pre-issue P/E ratio is 18.69x, and the post-issue P/E ratio is 28.49x, which are higher than industry averages, indicating the IPO is priced at a premium.

GMP and Subscription Status:

As of February 21, 2025, the Swasth Foodtech India IPO has been subscribed 3.77 times on its second day. The GMP stands at ₹0, indicating no expected listing gains.

IPO Allotment Process:

The allotment of shares will be finalized on February 25, 2025. To check allotment status, investors can visit the Registrar's website, enter the application number, PAN, or DP Client ID, and track their allotment status.

Promoter Background:

Swasth Foodtech India is led by a group of experienced promoters including Dilip Chhajer, Shrey Jain, Lakshay Jain, and others, with significant experience in the edible oil industry.

Conclusion:

Despite Swasth Foodtech India’s strong operational performance and sustainability efforts, the neutral GMP and high P/E ratios suggest that the IPO is fully priced. For investors seeking short-term listing gains, the GMP trend indicates no immediate price gains. However, those looking at long-term investments may consider the company’s growth trajectory in the edible oil market and its commitment to sustainability.

Recommendation:

Based on the current financial metrics and market sentiment, we advise potential investors to avoid the IPO if they are looking for quick listing gains or long-term growth potential due to the pricing and market conditions. However, long-term investors who believe in the company’s sustainable growth strategy in the edible oil sector may still find it a worthwhile opportunity.

The Upcoming IPOs in this week and coming weeks are Nukleus Office, Shreenath Paper.

The Current active IPO are Beezaasan Explotech, Swasth Foodtech, HP Telecom India.

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