Vandan Foods Limited, a prominent player in the castor oil and derivatives market, has launched its Initial Public Offering (IPO) on the BSE SME platform. The Vandan Foods IPO, a Fixed Price Issue, aims to raise ₹30.36 Crores through the fresh issuance of 26.40 lakh equity shares. The issue is priced at ₹115 per equity share, and the IPO subscription window is open from June 30 to July 2, 2025.

The shares are proposed to be listed on BSE SME with the tentative listing date scheduled for July 7, 2025. The market capitalisation of Vandan Foods Limited at the IPO price is estimated to be ₹96.42 Crores.

Vandan Foods IPO Details

The lot size for the IPO is 1,200 shares, which translates to a minimum investment of ₹1,38,000 for retail investors. High-Net-Worth Individuals (HNIs) need to apply for a minimum of 2 lots, amounting to ₹2,76,000.

The IPO is managed by Nirbhay Capital Services Private Limited as the Book Running Lead Manager, while Bigshare Services Private Limited is the registrar. Aftertrade Broking Private Limited, formerly known as RCSPL Share Broking Private Limited, will act as the Market Maker for this IPO.

Vandan Foods IPO GMP and Subscription Status

As per market sources, the Grey Market Premium (GMP) for Vandan Foods IPO is currently ₹0, indicating no speculative gains are expected at the time of listing. The GMP is not a regulated indicator and purely depends on demand and supply dynamics in the unregulated grey market. It is provided only for educational and informational purposes and should not be used for investment decisions.

As of 11:00 AM on July 1, 2025, the IPO is subscribed 0.48 times, which is less than 50% on the second day of the issue. This indicates a lukewarm response from investors so far.

IPO Allotment and Listing

The allotment of shares is expected to be finalized on Thursday, July 3, 2025. Investors can check their allotment status through the registrar’s website by selecting “Vandan Foods Limited” from the dropdown, entering either the Application Number, PAN, or DP Client ID, and submitting the details. The shares are likely to be listed on July 7, 2025.

Objectives of the IPO

Vandan Foods Limited has clearly stated the utilisation of net proceeds from the IPO across various strategic areas:

1. ₹857.00 Lakh will be used for Working Capital Requirements.

2. ₹300.00 Lakh will go towards prepayment or repayment of certain outstanding borrowings.

3. ₹829.00 Lakh is earmarked for Capital Expenditure for expansion of their Dhinoj Facility.

4. ₹751.40 Lakh will be used for General Corporate Purposes.

5. Funds will also cover Public Issue Expenses.

Company Overview

Vandan Foods Limited is a trusted name in the castor oil industry, catering to both domestic and international markets. The company boasts of a strong organizational culture, efficient control systems, and a team of skilled employees. Their operational efficiency has been a key factor in maintaining consistency in production and supply.

The company is promoted by Kalpeshkumar Bhagavandas Thakkar, Rakeshkumar Rameshbhai Patel, Jitendra Rameshbhai Patel, and Jyotsana Jitendrabhai Patel. Together, they bring over a decade of experience in the agriculture and derivatives sector. The promoters are actively involved in daily business operations, including sales, purchases, plant operations, finance, and general administration.

Financial Performance

The company has shown steady financial growth over the last few years. Below is a summary of the key financial metrics:

Revenue from Operations:

• ₹161.13 Lakh in FY22

• ₹1,159.35 Lakh in FY23

• ₹4,873.04 Lakh in FY24

• ₹7,266.38 Lakh for the period ending Dec 31, 2024

EBITDA:

• ₹5.81 Lakh in FY22

• ₹99.49 Lakh in FY23

• ₹364.56 Lakh in FY24

• ₹692.15 Lakh (Apr-Dec 2024)

Profit After Tax (PAT):

• ₹-11.43 Lakh in FY22

• ₹64.28 Lakh in FY23

• ₹264.43 Lakh in FY24

• ₹453.59 Lakh for Apr-Dec 2024

These figures highlight strong revenue growth and improving profitability, indicating a well-managed expansion strategy.

Valuation and Key Ratios

Based on the IPO price of ₹115 per share, the company's valuation metrics are as follows:

• Pre-Issue EPS (FY24): ₹4.64

• Post-Issue EPS (FY24): ₹3.15

• Pre-Issue P/E Ratio: 24.78x

• Post-Issue P/E Ratio: 36.47x

• Industry Average P/E: 15.00x

• ROCE (FY24): 37.33%

• ROE (FY24): 45.41%

• Return on Net Worth (RoNW): 27.92%

• Annualised EPS (FY24): ₹7.21

• Annualised P/E Ratio: 15.94x

Although the return ratios appear strong, the post-issue P/E multiple of 36.47x seems stretched compared to the industry benchmark. This could raise concerns over the valuation being on the higher side, especially when there is no active Grey Market Premium to back it.

Investment Recommendation

While the company has shown strong top-line growth, efficient management, and high returns on equity and capital, the absence of listing gains (0.00% GMP) suggests a lack of investor enthusiasm in the secondary market.

Given the higher valuation multiples, uncertain listing gains, and lukewarm subscription status, investors are advised to AVOID the Vandan Foods IPO for listing gains. However, those looking at a long-term horizon in the agriculture and castor oil derivatives sector may consider tracking the stock post-listing based on its quarterly performance.

Final Thoughts

Vandan Foods IPO provides an insight into a growing SME company tapping capital markets for further expansion. While its financials look promising and the objectives of the issue are clearly defined, the valuation and weak grey market sentiment do not support an optimistic listing outlook.

Investors are urged to exercise caution and make informed decisions based on fundamentals, valuation, and market conditions. The IPO’s performance in the coming days will be crucial to determine its potential as a sound long-term investment.

Disclaimer: The information provided is for educational purposes only and should not be considered financial advice. Please consult a professional advisor before making any investment decision.

The Upcoming IPOs in this week and coming weeks are Anthem Biosciences, Chemkart India, Meta Infotech, Happy Square Outsourcing Services, Cryogenic OGS, Crizac, .

The Current active IPO are Silky Overseas, Vandan Foods, Pushpa Jewellers, Cedaar Textile, Marc Loire Fashions, Neetu Yoshi, Adcounty Media India.

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