Vandan Foods Limited, a company specializing in castor oil and its derivatives, is entering the capital markets with its Initial Public Offering (IPO). The IPO, being a Fixed Price Issue, opens for subscription from June 30 to July 2, 2025, and is entirely a fresh issue comprising 26.40 lakh equity shares to raise ₹30.36 crores. The shares will be listed on the BSE SME platform, with the listing expected on Monday, July 7, 2025.

Company Profile

Vandan Foods Limited plays a key role in the castor oil processing industry, catering to both Indian and international markets. The company leverages a strong organisational culture, operational controls, and a skilled workforce to maintain efficiency and product quality.

It has developed a niche in agricultural derivatives, positioning itself as a reliable supplier of castor oil products through its Dhinoj Facility, which is also being expanded as part of the fund utilization plan.

IPO Details

GMP Status and Expected Listing

As of June 25, 2025, the Grey Market Premium (GMP) for Vandan Foods IPO is ₹0, suggesting no expected listing gains at this time.

The absence of GMP traction may indicate a lack of investor excitement in the unlisted market, although this is not always a conclusive predictor of listing performance.

Use of IPO Proceeds

Vandan Foods plans to utilise the IPO proceeds as follows:

1. ₹8.57 Cr – To meet working capital requirements

2. ₹3.00 Cr – For prepayment/repayment of borrowings

3. ₹8.29 Cr – For CAPEX at the Dhinoj Facility (expansion)

4. ₹7.51 Cr – For general corporate purposes

5. Balance – To meet public issue expenses

This distribution suggests that a major portion of the proceeds will go toward expanding capacity, reducing debt, and improving liquidity, potentially boosting future revenues and profitability.

Financial Highlights

The company has posted impressive revenue growth, with a sharp rise in business over the last few years.

Revenue from Operations

• FY2022: ₹161.13 Lakh

• FY2023: ₹1,159.35 Lakh

• FY2024: ₹4,873.04 Lakh

• 9M FY2025 (Ending Dec 31, 2024): ₹7,266.38 Lakh

EBITDA

• FY2022: ₹5.81 Lakh

• FY2023: ₹99.49 Lakh

• FY2024: ₹364.56 Lakh

• 9M FY2025: ₹692.15 Lakh

Profit After Tax (PAT)

• FY2022: ₹-11.43 Lakh (Loss)

• FY2023: ₹64.28 Lakh

• FY2024: ₹264.43 Lakh

• 9M FY2025: ₹453.59 Lakh

The exponential jump from losses in FY22 to significant profits by FY25 shows strong operational scaling. However, such fast growth in a short period may raise questions about sustainability.

Valuation Metrics

While return ratios are healthy, the post-issue P/E ratio appears high, signaling expensive valuation when compared to the industry benchmark.

Promoters and Management

The promoters – Kalpeshkumar Thakkar, Rakeshkumar Patel, Jitendra Patel, and Jyotsana Patel – have over a decade of experience in the agriculture and derivatives sector. Their active involvement in operations such as sales, finance, and administration adds to the company’s stability and strategic execution.

Their hands-on management and industry know-how have played a key role in the company’s rapid growth trajectory.

How to Check Allotment Status

The allotment status can be checked on Bigshare Services Pvt Ltd website after July 3, 2025.

Steps to Check Allotment:

1. Go to the IPO allotment portal

2. Select “Vandan Foods Limited IPO” from the dropdown

3. Enter PAN / Application Number / DP ID-Client ID

4. Submit and view the status

This will help investors identify whether they have been allotted shares and prepare for further trading or holding.

Investment Verdict

Pros:

• Strong recent revenue and profit growth

• High return ratios (ROCE and ROE)

• Focus on debt reduction and facility expansion

• Promoters with sector-specific experience

Cons:

• No GMP activity indicating weak short-term interest

• Valuation appears expensive (post-issue P/E of 36.47x)

• Short financial history with significant recent growth raises sustainability questions

• SME platform listing may limit liquidity post-IPO

Given the lack of Grey Market Premium, high valuation, and limited liquidity in SME listings, investors are advised to avoid Vandan Foods IPO for listing gains. However, those with a long-term investment horizon and high risk appetite may revisit the stock post-listing once more clarity on financial performance emerges.

Disclaimer:
This review is for educational purposes only and does not constitute investment advice. IPO investments carry risks. Always consult a registered financial advisor before making investment decisions. GMP figures are indicative and unofficial. Data used is as of June 2025 and subject to change.

The Upcoming IPOs in this week and coming weeks are Travel Food Services, Cryogenic, Crizac, Silky Overseas, Vandan Foods, Pushpa Jewellers, Cedaar Textile, Marc Loire Fashions.

The Current active IPO are Neetu Yoshi, Adcounty Media India, Moving Media Entertainment, Valencia India, PRO FX Tech, Ace Alpha Tech, Indogulf Cropsciences.

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