Swasth Foodtech India, a company specializing in the processing of edible rice bran oil, has caught attention with its IPO launch in 2025. The IPO, which opened on February 20, 2025, and closes on February 24, 2025, offers a fresh issue of 15.88 lakh shares. The issue is priced at ₹94 per share, leading to a market capitalization of ₹55.06 Crores at the IPO price. This IPO is a critical step for the company, and investors are keen to know the subscription details, allotment process, and listing prospects on the BSE SME.

Key Financials and Business Highlights:

Swasth Foodtech India, known for its high-quality edible rice bran oil, has built a reputation for its balanced fat profile, high smoke point, and neutral flavor, making it a preferred choice for manufacturers and packers. The company also produces various byproducts such as fatty acids, gums, spent earth, and wax, supporting sustainability in its operations. This diversification reflects in the company's revenue performance, with recent fiscal years showing consistent growth.

For the period ended September 30, 2024, Swasth Foodtech recorded revenues of ₹8,863.21 lakh. The EBITDA was ₹348.44 lakh, while the profit after tax was ₹182.94 lakh, showing robust profitability compared to previous years. This growth is indicative of the company's strong position in the edible oil industry, and its IPO comes at a time when the market is showing increased interest in sustainable and healthy food products.

Subscription Status and Grey Market Premium:

As of February 24, 2025, the IPO has been subscribed 7.02 times on its final day of subscription. This strong demand is reflected in the Grey Market Premium (GMP), which currently stands at ₹0. While this indicates no significant premium in the grey market, the real price discovery will take place post-listing on the BSE SME. The allotment date is set for February 25, 2025, and the listing date is expected on February 28, 2025.

Allotment Process:

Investors can check their IPO allotment status on the registrar's website by entering their application number or PAN details. This is a simple process to track whether they have been allotted shares, ensuring timely updates for all participants in the IPO.

Objectives of the IPO:

Swasth Foodtech India intends to utilize the net proceeds from the IPO for the following purposes:

1. ₹329.87 lakhs for setting up a packing line at its existing manufacturing unit.
2. ₹750.00 lakhs to fund its working capital requirements.
3. ₹220.00 lakhs for general corporate purposes.

Investment Consideration:

Given the financial performance, the company has shown resilience and growth over the years, but the IPO is considered fully priced with a pre-issue P/E ratio of 18.69x. The post-issue P/E ratio increases to 28.49x, reflecting a higher valuation. The Return on Capital Employed (ROCE) is 13.48%, and the Return on Equity (ROE) stands at 30.97% for FY24. These metrics indicate a company that is solid but might not offer significant listing gains. Thus, the IPO is recommended to avoid for listing gains or long-term investments at this point.

Conclusion:

The Swasth Foodtech India IPO presents an interesting opportunity for investors looking into sustainable edible oils and food production companies. However, considering the fully priced valuation and limited Grey Market Premium, this IPO might not provide major gains on listing. Investors should assess their risk appetite and decide accordingly.

In conclusion, Swasth Foodtech India's IPO offers insights into a growing foodtech company, but potential investors should weigh the financials and market sentiment before making an investment decision. The IPO may appeal more to those with a long-term investment strategy rather than those looking for immediate listing gains.

The Upcoming IPOs in this week and coming weeks are Shreenath Paper, Balaji Phosphates.

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

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