– By Dilip Davda
- The company is engaged in the manufacturing and marketing of in-house as well as white label products.
- It sells its products under the brand names like “Zhakaas”, “Vishal”, “Rozana”, “Diamond”, and “Papadmalji”.
- It posted growth in its top and bottom lines for the reported periods.
- Based on its recent average financial data, the issue appears fully priced.
- Investors may park funds for medium to long term.
ALERT: IN VIEW OF THE LIKELY BANK STRIKE FROM 28.09.26 TO 30.09.26, THE IPOS/PRIMARY OFFERS THAT ARE FALLING BETWEEN THESE THREE DAYS, IPOS SCHEDULE TIME LINE MAY CHANGE AND THE REVISED DATES WILL GET EFFECTIVE FOR OPENING AND / OR CLOSING SCHEDULES, AS THE CASE MAY BE. INVESTORS ARE REQUESTED TO MAKE A NOTE OF THIS.
ABOUT COMPANY:
Papadmalji Agro Foods Ltd. (PAFL) is engaged in the in-house manufacturing of:
- Hand-Made Papads, • Machine-Made Papads, • Machine-Made ready to Fry Papads, • Rice Papads (Khichiya), • Vrat Special Papads, and • Moongodi.
In addition to in-house manufacturing, it also undertakes white label manufacturing of Handmade Papads for clients, wherein products are produced by the Company and marketed by clients under their respective brand names and packaging, tailored to their target market. This combination of in-house and white label manufacturing enables the Company to leverage its production, optimize capacity utilization, diversify revenue streams and maintain consistent demand.
At the same time, clients benefit by expanding their product portfolio without investing in manufacturing infrastructure, strengthening brand presence and ensuring product quality and reliability. Furthermore, the Company is engaged in the trading of Cereal Pellets where these products are sourced and traded by the Company under its own brand, complementing its manufacturing operations and providing an additional revenue stream. While handmade papads continue to represent a significant share of its revenue, it has invested in machine-based production to enhance scalability, consistency, and hygiene standards. Its facilities are equipped with semi-automated and automated machinery for dough preparation, sheeting, rolling, cutting, drying and packaging. The combination of traditional and mechanized methods enables it to balance scale with heritage-based production.
The Company operates a portfolio of brands comprising Zhakaas, Vishal, Rozana, Diamond and Papadmalji, each positioned to address different product categories, consumer segments and distribution channels. Papad is a traditional Indian food item that is commonly consumed as an accompaniment or snack across households, religious occasions, festivals, and social gatherings. It has historically formed part of customary meals and traditional culinary practices in several regions of India.
Over time, consumption of papad has extended beyond household and ceremonial use to include hotels, restaurants, catering services and institutional consumption. In line with these consumption trends, the Company has focused on the organized manufacture and distribution of papads across multiple formats and channels. With this vision in mind, the brand name “Papadmalji” was adopted to reflect the heritage of papad making and was registered as a device mark on March 30, 2017. In line with the adopted brand identity and business objectives, it formally incorporated Papadmalji Agro Foods Private Limited on December 19, 2017 with the Registrar of Companies, Central Registration Centre, Manesar. The company subsequently acquired the business of sole proprietorship firm “Vishal Namkeen Bhandar” pursuant to a Business Transfer Agreement (BTA) dated February 17, 2018, on a slump sale basis, in accordance with the terms and conditions set forth in the BTA. Pursuant to the execution of the BTA, PAFL acquired all assets and liabilities relating to the business as on the effective date of the BTA. As of March 31, 2026, its products were sold in 21 states and 3 Union Territories in India. As of March 31, 2026, it had 118 employees on its payroll and additional 22 contract workers.
ISSUE DETAILS/ CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO of 2803200 equity shares of Rs. 10 each to mobilize Rs 20.18 cr. at the upper cap. The IPO consists of 2572800 fresh equity shares (worth Rs. 18.52 cr. at the upper cap), and an Offer for Sale (OFS) of 230400 equity shares (worth Rs. 1.66 cr. at the upper cap). The company has announced a price band of Rs. 69 – Rs. 72 per share. The minimum application to be made is for 3200 shares and in multiples of 1600 shares thereon, thereafter. The IPO opens for subscription on September 29, 2026, and will close on October 01, 2026. The IPO constitute 29.85% of the post-IPO paid-up capital of the company. The shares will be listed on NSE SME Emerge. From the net proceeds, it will utilize Rs. 7.90 cr. for capex on new manufacturing facility along with roof top solar plant, Rs. 5.80 cr. for repayment/pre-payment of certain borrowings, and the rest for general corporate purposes.
The IPO is solely lead managed by Kreo Capital Pvt. Ltd., while MAS Services Ltd., is the registrar to the issue. Giriraj Stock Broking Pvt. Ltd., is the market maker.
The company has issued initial equity capital at par value, and issued further equity shares at a fixed price of Rs.388 per share between April 2018, and February 2020. It has also issued bonus shares in the ratio of 8 for 1 in September 2025. The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. 1.10, Rs. 1.11, Rs. 9.00, and Rs. 43.11 per share.
Post-IPO, company’s current paid-up equity capital of Rs. 6.82 cr. (6819558 equity shares) will stand enhanced to Rs. 9.39 cr. (9392388 equity shares). Based on the upper band of the IPO pricing, the company is looking for a market cap of Rs. 67.63 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has reported a total income/net profit of Rs. 26.29 cr. / Rs. 2.11 cr. (FY24), Rs. 31.76 cr. / Rs. 4.72 cr. (FY25), and Rs. 33.54 cr. / Rs. 5.21 cr. (FY26). It marked growth in its top and bottom lines for the reported periods. Its contingent liabilities as of March 31, 2026 stood at Rs. 2.77 cr., raising concern. Year-on-year rising trade receivables raise alarm.
For the last three fiscals, the company has reported an average EPS of Rs. 6.65, and an average RoNW of 36.22%. The issue is priced at a P/BV of 3.04 based on its NAV of Rs. 23.67 per share as of March 31, 2026, and at a P/BV of 1.94 based on its post-IPO NAV of Rs.37.20 per share (at the upper cap).
If we attribute FY26 super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 12.97, and based on FY25 earnings, the P/E stands at 14.31. The issue appears fully priced, based on its average earnings.
For the reported periods, the company has posted PAT margins of 8.02% (FY24), 14.88% (FY25), 15.54% (FY26), and RoCE margins of 32.26%, 44.51%, 46.47%, respectively, for referred periods.
DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It has adopted a dividend policy in October 2025, based on its future prospects, and financial performance.
COMPARISON WITH LISTED PEERS:
As per the offer document, the company has no listed peers to compare with.
MERCHANT BANKER’S TRACK RECORD:
This is the 4th mandate from Kreo Capital, in the last three fiscals (including the ongoing one). Out of the last 3 listings, 2 opened at discount, 1 at par. The merchant banker has a poor track record so far.
CONCLUSION:
PAFL is engaged in the manufacturing and marketing of in-house as well as white label products. It sells its products under the brand names like “Zhakaas”, “Vishal”, “Rozana”, “Diamond”, and “Papadmalji”. It posted growth in its top and bottom lines for the reported periods. Based on its recent average financial data, the issue appears fully priced. Investors may park funds for medium to long term.
Review By Dilip Davda on August, 2026
Review Author
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detailed fundamental and financial analysis of companies coming up with IPOs helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
