Vandan Foods Limited, a company deeply rooted in the castor oil industry, has launched its Initial Public Offering (IPO) via the fixed price route on the BSE SME platform. Known for its expanding domestic and international reach, the company is offering 26.40 lakh equity shares at a fixed price of ₹115 per share, targeting a total fundraise of ₹30.36 Crores.

IPO Details: Dates, Size, and Lot

The IPO opened on June 30, 2025, and closes on July 2, 2025. The allotment is expected on July 3, and the shares are proposed to be listed on the BSE SME platform by July 7, 2025.

• Issue Type: Fixed Price

• Issue Size: ₹30.36 Crores

• Shares Offered: 26.40 lakh equity shares

• Issue Price: ₹115 per equity share

• Market Capitalisation at Issue Price: ₹96.42 Crores

• Lot Size: 1,200 shares

• Retail Minimum Investment: ₹1,38,000

• HNI Minimum Investment: ₹2,76,000

Key Intermediaries

• Lead Manager: Nirbhay Capital Services Pvt. Ltd.

• Registrar: Bigshare Services Pvt. Ltd.

• Market Maker: Aftertrade Broking Pvt. Ltd. (formerly RCSPL Share Broking Pvt. Ltd.)

Grey Market Premium (GMP) – Currently Flat

As of July 2, 2025, the Grey Market Premium (GMP) of Vandan Foods IPO is ₹0, implying no speculative listing gain. The IPO listing price is expected to be at par with the issue price, i.e., ₹115 per share. The absence of GMP activity typically indicates tepid market interest or cautious investor sentiment. However, grey market trends are informal and should be viewed cautiously.

IPO Subscription Status – 1.16x on Final Day

The IPO has been subscribed 1.16 times as of 11:00 AM on July 2, 2025. Although this indicates a fully subscribed issue, the marginal oversubscription reflects moderate interest from retail and HNI investors.

How to Check Allotment Status Online

The IPO allotment will be available on the registrar’s website (Bigshare Services) from July 3, 2025. Follow these steps:

1. Visit the IPO allotment status page.

2. Select Vandan Foods Limited IPO from the dropdown.

3. Enter your application number, PAN, or DP Client ID.

4. Submit the form to view allotment status.

Use of IPO Proceeds

The company plans to utilize the net proceeds as follows:

1. ₹8.57 Crores – Working Capital Requirements

2. ₹3.00 Crores – Repayment or prepayment of certain borrowings

3. ₹8.29 Crores – Expansion of the Dhinoj Facility (CAPEX)

4. ₹7.51 Crores – General Corporate Purposes

5. Remaining – Issue Expenses

This breakdown reveals the company’s focus on capacity expansion, debt reduction, and enhancing liquidity for smooth operations.

Company Overview: What Does Vandan Foods Do?

Vandan Foods Limited is a prominent player in the castor oil and derivatives segment, serving both domestic and global markets. The company’s strong operational framework, internal controls, and experienced human resources help in maximizing operational efficiency.

The company’s promoters include:

• Kalpeshkumar Bhagavandas Thakkar

• Rakeshkumar Rameshbhai Patel

• Jitendra Rameshbhai Patel

• Jyotsana Jitendrabhai Patel

Together, they hold over 10 years of combined experience in agriculture and castor oil derivative businesses, actively managing daily operations like sales, purchases, finance, and plant functions.

Financial Performance Snapshot

Vandan Foods has shown a remarkable upward trajectory in revenues and profits over the past four years:

The company's financial journey from losses in FY22 to a robust profit in FY24 and 9M FY25 highlights a positive turnaround in performance. EBITDA and PAT margins have expanded substantially, indicating improved efficiency and scale.

Valuation Metrics and Ratios

While the pre-issue P/E is quite steep compared to industry standards, the annualised P/E is more reasonable at 15.94x, reflecting potential long-term value. The high ROCE and ROE are encouraging but may already be priced into the IPO.

Vandan Foods IPO Review – Should You Invest?

While Vandan Foods showcases strong revenue growth, improved margins, and excellent returns on capital, certain red flags dampen the IPO’s appeal for short-term investors:

Positives:

• Fast-growing castor oil business with global exposure

• Consistent increase in revenue and profits over four years

• Robust return ratios (ROCE, ROE)

• Strategic use of funds for CAPEX and debt reduction

Concerns:

• GMP is flat at ₹0, indicating no listing premium

• Relatively high P/E ratio on post-issue basis

• Small issue size and limited liquidity post-listing

Given the current GMP and subscription status, listing gains are unlikely, making the IPO unsuitable for short-term investors. However, long-term investors seeking exposure in niche agri-based processing may consider tracking the stock post-listing for better entry points.

Conclusion

The Vandan Foods IPO, with an issue price of ₹115, a moderate subscription of 1.16x, and zero GMP, signals low short-term momentum. While the company’s fundamentals are steadily improving, the valuation appears stretched for now.

For investors aiming for listing gains, this IPO might not be the ideal pick. Long-term investors who believe in the castor oil derivative market and the company’s expansion plan should consider entering only after observing post-listing performance.

Disclaimer:
This article is for educational and informational purposes only and does not constitute investment advice. Investors are advised to conduct their own due diligence or consult a SEBI-registered advisor before making any financial decisions. All views are based on publicly available information as of the publication date and may change in the future.

The Upcoming IPOs in this week and coming weeks are Smarten Power Systems, Glen Industries, Travel Food Services, Anthem Biosciences, Chemkart India, Meta Infotech, Happy Square Outsourcing Services, Cryogenic OGS.

The Current active IPO are Crizac, Silky Overseas, Vandan Foods, Pushpa Jewellers, Cedaar Textile, Marc Loire Fashions.

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