Vandan Foods Limited is a key player in the castor oil and derivatives market, catering to both domestic and global customers. The company is coming out with a ₹30.36 crore fixed-price IPO, aiming to strengthen its operations, enhance capacity, and capitalise on growth opportunities in the agri-commodity processing sector.

Company Overview

Vandan Foods operates as a castor oil producer and supplier of its by-products, focusing on:

• Agricultural excellence

• Global and domestic B2B market coverage

• Effective operational systems and internal control

The company's strength lies in its workforce, structured business model, and efficient execution of plant operations.

Sustainability and industrial utility are at the core of Vandan’s operations, making castor oil a high-demand export product.

IPO Details

• IPO Type: Fixed Price Issue

• Issue Size: ₹30.36 Crores (entirely fresh issue of 26.40 lakh shares)

• Price Per Share: ₹115

• Market Capitalisation (at ₹110): ₹96.42 Crores

Key Dates:

• IPO Opens: June 30, 2025

• IPO Closes: July 02, 2025

• Allotment Date: Expected July 03, 2025

• Listing Date (BSE SME): Tentative July 07, 2025

Investment Terms

• Lot Size: 1,200 shares

• Retail Minimum Investment: ₹1,38,000

• HNI Minimum Investment: ₹2,76,000 (2 lots)

These limits align with SME norms and are suited for serious long-term investors.

IPO Handling Parties

• Book Running Lead Manager: Nirbhay Capital Services Private Limited

• Registrar: Bigshare Services Private Limited

• Market Maker: Aftertrade Broking Private Limited (formerly RCSPL Share Broking)

Their combined expertise provides stability to the IPO process and enhances investor confidence.

Promoters and Management

The company is led by Kalpeshkumar Thakkar, Rakeshkumar Patel, Jitendra Patel, and Jyotsana Patel, with a combined experience of over 10 years in:

• Agriculture

• Agri-derivatives

• Plant operations

• Sales and procurement

• Finance and administration

Their hands-on involvement ensures smooth day-to-day operations.

Business Growth and Product Reach

Vandan Foods is a rising player in:

• Castor oil refining and processing

• Supplying castor derivatives across India and international markets

• Serving industrial, chemical, and pharmaceutical segments

The company's core strength is its ability to scale up with operational efficiency and maintain product quality.

Financial Performance

Revenue from Operations:

• FY22: ₹161.13 Lakh

• FY23: ₹1,159.35 Lakh

• FY24: ₹4,873.04 Lakh

• Period ended Dec 31, 2024: ₹7,266.38 Lakh

EBITDA:

• FY22: ₹5.81 Lakh

• FY23: ₹99.49 Lakh

• FY24: ₹364.56 Lakh

• Dec 2024 (9 months): ₹692.15 Lakh

Profit After Tax:

• FY22: ₹-11.43 Lakh

• FY23: ₹64.28 Lakh

• FY24: ₹264.43 Lakh

• Dec 2024 (9 months): ₹453.59 Lakh

The company shows strong financial growth year-on-year, indicating expansion success and margin improvement.

Valuation Metrics

• Pre-issue EPS (FY24): ₹4.64

• Post-issue EPS: ₹3.15

• Pre-issue P/E Ratio: 24.78x

• Post-issue P/E Ratio: 36.47x

• Industry P/E Ratio: 15.00x

Annualised EPS (Dec 2024 extrapolated): ₹7.21
Annualised P/E Ratio: 15.94x

Return Ratios:

• ROCE: 37.33%

• ROE: 45.41%

• RoNW: 27.92%

Although the valuation appears high post-issue, return metrics are relatively healthy, reflecting effective capital deployment.

Grey Market Premium (GMP)

• Current GMP: ₹0

• Implied Listing Gain: None anticipated at the moment

Investor Note:

• GMP is unregulated and based on informal sentiment.

• A zero GMP implies flat listing expectations, though not necessarily a poor business outlook.

Competitive Strengths

• Strong operational growth in a short span

• Focused product segment with global demand

• Experienced and active promoter group

• Scalable operations with robust internal controls

These advantages give the company an edge in the agri-processing and export-oriented markets.

Risks and Challenges

• High P/E valuation compared to industry peers

• GMP at zero indicates no enthusiasm for short-term listing gains

• SME platform listings generally have lower post-listing liquidity

• Commodity price fluctuations can impact profitability

Investors should consider these while assessing entry timing and holding period.

Analyst Recommendation

While Vandan Foods' financials show a promising growth trajectory, the high valuation and lack of listing premium suggest caution for short-term investors.

Recommendation:

• Avoid for listing gains, as near-term upside appears limited.

• Long-term investors with sector interest may evaluate post-listing entry after observing stock performance and liquidity.

Conclusion

The Vandan Foods IPO is backed by a fast-growing business, with solid fundamentals in the castor oil and agri-derivatives sector.

Key Positives:

• Strong revenue and profit growth

• Efficient operations

• Expanding market presence

Key Concerns:

• High P/E valuation

• No GMP-driven momentum

• SME listing risks

Unless you're a sector-focused long-term investor, this IPO may be better approached with patience.

Disclaimer:

This article is intended for informational and educational purposes only and does not constitute investment advice. Readers are advised to consult their financial advisor before making any investment decisions. Investments in securities are subject to market risks. Please read all related documents carefully before applying for the IPO. The data provided is based on publicly available information and may be subject to change.

The Upcoming IPOs in this week and coming weeks are Asston Pharmaceuticals, CFF Fluid Control, Smarten Power Systems, Glen Industries, Travel Food Services, Anthem Biosciences, Chemkart India.

The Current active IPO are Meta Infotech, Happy Square Outsourcing Services, Cryogenic OGS.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.