The Vandan Foods IPO, a Fixed Price Issue of ₹ 30.36 Crores, concluded its subscription period on July 2, 2025, with a subscription status of 1.16 times. Despite offering a reasonably structured investment proposal, the IPO received lukewarm investor response, especially in the Grey Market, where the Grey Market Premium (GMP) stood at ₹ 0 throughout the bidding window.

Vandan Foods Limited is known as a leading castor oil processor and a major supplier of castor oil derivatives. Its clientele spans both Indian and international markets, supported by a robust internal culture, effective control mechanisms, and the expertise of its operational team. Their ability to deliver quality and maintain efficiency has positioned the company as a trusted partner in the agri-derivatives space.

IPO Structure and Offer Details

The IPO of Vandan Foods comprises a Fresh Issue of 26.40 lakh equity shares, aggregating up to ₹ 30.36 Crores. The IPO does not include an Offer for Sale, meaning all proceeds will be directed towards the company’s future growth and operational needs.

• IPO Price: ₹ 115 per equity share

• Lot Size: 1,200 shares

• Retail Minimum Investment: ₹ 1,38,000

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

• Post-issue Market Capitalisation: ₹ 96.42 Crores

The company has appointed Nirbhay Capital Services Private Limited as the Book Running Lead Manager (BRLM), while Bigshare Services Private Limited is acting as the Registrar. The Market Maker for the IPO is Aftertrade Broking Private Limited.

Grey Market Premium and Market Sentiment

As of 2 July 2025, the GMP for Vandan Foods IPO remained at ₹ 0, reflecting a lack of speculative interest and uncertainty around listing gains.

Grey Market activity plays a psychological role in determining IPO popularity, but in the case of Vandan Foods, investors appear cautious due to valuation concerns and comparatively high minimum investment thresholds.

Live Subscription Status

By 11:00 AM on July 2, 2025, the final day of the subscription period, the IPO was subscribed 1.16 times overall. This suggests that while there was adequate interest, especially from HNIs and institutions, the response from retail investors was subdued.

How to Check IPO Allotment

The IPO allotment is expected to be finalized by Thursday, July 3, 2025, and investors can check their allotment status on the Registrar’s website using:

• Application Number

• PAN Number

• DP Client ID

Once the details are submitted, investors can determine their allotment status and prepare for listing, which is expected to happen on Monday, July 7, 2025, on the BSE SME platform.

Use of IPO Proceeds

The net proceeds from the IPO will be used for the following purposes:

1. ₹ 857.00 Lakhs for Working Capital Requirements

2. ₹ 300.00 Lakhs for Repayment/Prepayment of Outstanding Borrowings

3. ₹ 829.00 Lakhs for Capital Expenditure for Expansion of Dhinoj Facility (CAPEX)

4. ₹ 751.40 Lakhs for General Corporate Purposes

5. To meet Public Issue Expenses

This diverse allocation strategy highlights the company's focus on operational growth, debt reduction, and infrastructure enhancement.

Company Overview and Business Model

Vandan Foods Limited operates in the agriculture derivatives segment, primarily dealing in castor oil and its by-products. The company’s focus is on maintaining process quality and building strong customer relationships across domestic and global markets.

The promoters—Kalpeshkumar Thakkar, Rakeshkumar Patel, Jitendra Patel, and Jyotsana Patel—collectively bring more than a decade of experience in the industry. Their leadership is credited with turning the company into a reliable castor oil processor, driven by operational discipline and strategic expansion.

Financial Performance

The company has reported consistent revenue and profit growth over the last three years, which adds a layer of credibility and confidence in its business model.

Revenue from Operations:

• Dec 31, 2024 (9 months): ₹ 7,266.38 Lakhs

• FY 2024: ₹ 4,873.04 Lakhs

• FY 2023: ₹ 1,159.35 Lakhs

• FY 2022: ₹ 161.13 Lakhs

EBITDA:

• Dec 31, 2024: ₹ 692.15 Lakhs

• FY 2024: ₹ 364.56 Lakhs

• FY 2023: ₹ 99.49 Lakhs

• FY 2022: ₹ 5.81 Lakhs

Profit After Tax (PAT):

• Dec 31, 2024: ₹ 453.59 Lakhs

• FY 2024: ₹ 264.43 Lakhs

• FY 2023: ₹ 64.28 Lakhs

• FY 2022: ₹ -11.43 Lakhs

These figures illustrate a strong growth trajectory, especially the turnaround from losses in FY22 to robust profits in FY24.

Valuation Metrics

Here are some key metrics that reflect the company's financial health and IPO pricing:

• 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 P/E Average: 15.00x

• Annualised EPS: ₹ 7.21

• Annualised P/E: 15.94x

• ROCE (FY24): 37.33%

• ROE (FY24): 45.41%

• RoNW: 27.92%

The company’s high ROE and ROCE figures indicate operational efficiency, but the P/E valuation is on the higher side, particularly when compared to industry peers. This raises concerns about whether the IPO is fairly priced.

Final Verdict: Avoid for Listing Gains

While Vandan Foods Limited shows strong revenue growth, profitability improvements, and impressive capital efficiency, the valuation multiples appear stretched. Additionally, the lack of enthusiasm in the grey market and minimal oversubscription point towards muted short-term prospects.

Given these factors, analysts recommend investors avoid subscribing to the Vandan Foods IPO for listing gains. However, long-term investors who believe in the castor oil and derivatives segment may keep this stock on their watchlist post-listing.

Disclaimer:
The information presented in this review is for educational and informational purposes only and should not be treated as financial or investment advice. Investors must conduct their own due diligence and consult professional advisors before investing. Investments in securities are subject to market risks. Please read all offer documents carefully before proceeding with any investment.

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 Crizac, 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.