Srivari Spices and Foods IPO - Price, Review, GMP & Valuation

Srivari Spices and Foods Limited - Complete Overview

Founded in 2019, Srivari Spices and Foods Limited specializes in the production of spices and chakki atta (flour), distributing and selling its offerings primarily within the regions of Telangana and Andhra Pradesh.

The main goal of the company is to craft premium-grade, organic spices and food items that are devoid of synthetic additives or chemicals.

By meticulously selecting raw materials from diverse corners of the country, Srivari Spices and Foods Limited meticulously processes its goods with great attention, ensuring the absence of artificial preservatives or chemicals.

This approach results in an assortment of organic spices and flour, each retaining the inherent freshness and nutritional value of its constituents.

Benefiting from a direct sourcing arrangement with farmers, the company is able to introduce a distinctive pricing structure, positioning its products competitively lower than the other competitors. The product portfolio encompasses a diverse array of Spices, Masalas, and Atta.

The business operates through two primary models, namely D2C and B2B. The company has a robust customer base of 15,000 retail stores. In 2021, the company was also bestowed with the title of 'Best Emerging Spices Brand- 2021' by Business Mint.

 

What does the company do? 

Srivari Spices and Foods Limited operates in the manufacturing of spices and flour (chakki atta), distributing and selling its offerings primarily within the regions of Telangana and Andhra Pradesh.

 

 

Company Products 

The company's product lineup comprises a diverse range of spices, masalas, and atta.

 

IPO Overview

The upcoming IPO of Srivari Spices and Foods Limited is set to be open for subscription from August 7th to August 9th, 2023, on the NSE SME.

The IPO has a total issue size of 2,142,000 shares, amounting to a total of Rs.9.00 Crores. Within this issuance, the company has allocated 50% to institutional investors, 15% to non-institutional investors, and 35% to retail investors.

The shares are priced in the range of Rs.40 to Rs.42 per share, with a single lot consisting of 3000 shares. The anticipated date for the shares to be listed on the stock market is August 18th, 2023.

 

Srivari Spices and Foods Limited IPO timetable

EVENTS	DATE
IPO Opening Date	7 August 2023
IPO Closing Date	9 August 2023
IPO Allotment Date	14 August 2023
Refund initiation	16 August 2023
IPO Listing Date	18 August 2023

 

Srivari Spices and Foods Limited IPO Details

IPO Opening & Closing Date	7 August to 9 August 2023
Face Value	Rs. 10 per share
Issue Price	Rs. 40 to Rs. 42 per share
Lot Size	3000 Shares
Price of 1 Lot	Rs. 126,000
Issue Size	2,142,000 shares (aggregating up to Rs. [9.00] Cr)
Offer for Sale	NA
Fresh Issue	2,142,000 shares (aggregating up to Rs. [9.00] Cr)
Listing at	NSE SME
Issue Type	Book Built Issue IPO
Registrar	Bigshare Services Pvt. Ltd.

 

Srivari Spices and Foods Limited IPO Lot Details

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	1 Lot
Minimum Lot Investment (HNI)	2 Lot

 

Srivari Spices and Foods Limited IPO Reservation

Institution Portion	50%
Non-Institution Portion	15%
Retail Portion	35%

 

Company Financial

Amount in Crores

Period	FY 21	FY 22	FY 23
Total Assets	627.38	1067.62	2568.13
Total Revenue	1139.90	1764.21	3582.01
PAT	35.26	72.84	312.61
Net Worth	426.91	499.75	910.02
Reserve & Surplus	24.57	97.41	410.02
Total Borrowings	--	277.39	1283.51

 

Revenue Earned from the Sale of Spices and Wheat Flour by the Company

Amount in Lakhs

Particular	FY 23	FY 22	FY 21
Spices	2,267.05	1,764.21	1,139.90
Wheat flour	1,314.23	-	-
Total	3,581.28	1,764.21	1,139.90

 

Revenue Breakup of the Preceding of the Company

Amount in Lakhs

Particular	FY 23	FY 22	FY 21
Revenue from Operations	3581.29	1,764.21	1,139.90
Other Income	0.72	-	-
Total	3582.01	1,764.21	1,139.90

 

Revenue Breakup of the Top Five and Top Ten Customers

Amount in Lakhs

Particular	FY 23	FY 22	FY 21
Top 5 customers	1,990.82	1008.64	527.46
Top 10 customers	2,515.44	1389.92	646.36

 

Objective of the Issue

The funds raised from the issue will be utilized to accomplish the following objectives:

• Meeting the company's working capital requirements.
• Addressing general corporate needs.

 

Promoters and Management of Srivari Spices and Foods Limited

The primary promoters of Srivari Spices and Foods include Rathi Narayan Das, aged 45, who serves as the Promoter, Chairman, and Whole-time Director of the company and Neihaa Rathi, aged 41, holds the position of Promoter and Whole-time Director within the company.

Pre-issue Promoters Holding	99.90%
Post-issue Promoters Holding	NA

 

Peer Comparison

Following are the key competitors of Srivari Spices and Foods Limited:

Company Name	CMP	EPS	P/E Ratio	Total Income (Rs. in Lakhs)
Contil India Limited	75.88	2.01	37.75	1995.28
Jetmall Spices And Masala Limited	23.03	0.49	47.00	394.90
Srivari Spices and Foods Limited	-	7.07	-	3582.01

 

IPO's Valuations

The Srivari Spices IPO price range between Rs.40 to Rs.42 per share, with an EPS of Rs.7.07. While the PE ratio is not specified in the DRHP, we can deduce it from the provided IPO valuation data. If we consider the upper band of the issue price, the P/E ratio is estimated to be approximately 6.

 

Dividend Policy

The company has not distributed any dividends in the past, and there is no assurance of future dividend payments as stated in the Srivari Spices and Foods Limited DRHP.

 

IPO's Strengths

• Wide range of products.
• Resilient and capable management team.
• Recognized and well-established brand identity.
• Established connections with both clients and suppliers.
• Distinctive and environmentally viable business approach.
• Rigorous quality assurance and quality control of the products.

 

IPO Weaknesses

• Necessity to secure licenses and approvals across various legislations.
• Instances of delays in submitting requisite forms as per reporting obligations.
• Occurrences of inadvertent submission of inaccurate information to the RoC in statutory filings.
• Absence of long-term agreements with raw material suppliers.
• Significant reliance on a small number of customers for a substantial portion of revenue.
• Business operations are conducted based on purchase orders, resulting in the absence of long-term customer agreements.
• Limited operational history of the company.
• The company had experienced negative cash flow in the past.
• Utilization of certain unsecured loans that remain subject to potential recall.
• Conducting business within a competitive environment.

 

 

IPO GMP Today

As on 09 August, 2023 Srivari Spices and Foods IPO GMP is Rs.25(+/-).

 

Conclusion

The company operates within a limited region and has experienced negative cash flow in the past. However, it has effectively gained the trust of its customers and suppliers, as evidenced by its robust supply chain serving both B2B and D2C segments. Experienced investors, after conducting thorough research of all relevant factors, may consider applying for the IPO to attain optimal outcomes. 

 

Hope you enjoyed this IPO analysis. Tap to Apply

 

To Read the Prospectus of the Company Click Here to Download the DRHP

 

 

Thank You for reading this blog.
Hope you loved the IPO analysis.
Please Comment Below with your feedback because Your feedback motivates us to deliver more such content.

 

Follow MUKUL AGRAWAL for the latest IPO news and reviews. You can connect with us on social media platforms like Twitter, Facebook, and Instagram. You can also subscribe to our YouTube Channel for the latest videos of the stock market.