Ganesh Consumer IPO review

•    The company is eastern region centric FMCG company enjoying third largest brand in packaged wheat products.
•    It marked steady growth in its top lines for the reported periods.
•    After static bottom lines for FY23 and FY24, it marked improved earnings for FY25.
•    The company is operating in a highly competitive and fragmented segment.
•    Based on its recent financial data, the issue appears fully priced.
•    The company is operating in a high volume/low margin segment.
•    Well-informed investors may park moderate funds for long term.

ABOUT COMPANY:
Ganesh Consumer Products Ltd. (GCPL) is a FMCG company headquartered in Kolkata, West Bengal and in terms of value sold in Fiscal 2025, it is the third largest brand of packaged whole wheat flour (atta) and largest brand in wheat-based derivatives (maida, sooji, dalia) in East India. (Source: Technopak Report) In East India, in terms of value for Fiscal 2025, the Company is also one of the top two players for packaged sattu and besan (which are gram-based flour products) with a share ~43.4% (sattu) and ~4.9% (besan) in East India market for respective products, with a growing presence in various consumer staple categories such as spices and ethnic snacks. (Source: Technopak Report) In West Bengal GCPL has a share of approximately 40.5% by value sold in Fiscal 2025 for wheat-based products including wheat flour, maida, sooji and dalia. (Source: Technopak Report) omni-channel presence through its general trade channels, modern trade channels and e-commerce channels. As on March 31,2025, it services general trade channel with over 28 C&F agents, 9 super stockists and 972 distributors. As on March 31, 2025, its product portfolio comprises of 42 products with 232 SKUs across our various product categories.

It offers a range of consumer staples comprising of (i) whole wheat flour (atta), (ii) wheat and gram-based value-added flour products (including, refined wheat flour (maida), semolina flour (sooji), roasted gram flour (sattu), gram flour (besan), cracked wheat (dalia) amongst others) and (iii) other emerging food products including packaged instant food mixes (such as khaman dhokla and bela kachori), spices (whole, CTC powder (chilly, turmeric and coriander) and blended), ethnic snacks (such as (including bhujia and chanachur) and ethnic flours such as singhara flour, pearl millet (bajri) flour, etc. Its products are sold under flagship brand “Ganesh”, which serves as its primary identity in the market. In order to meet a varied range of consumer needs in the market, the brand has been expanded through multiple brand extensions, offering a variety of products with unique attributes tailored to specific market segments. The company has consistently sought to evolve product portfolio, resulting in the launch of 11 products (spices, ethnic snacks, variants of sattu like chocolate sattu, jal jeera sattu, etc.), along with 94 SKUs across its product categories, over the past three financial years.

GCPL’s business is primarily driven by its business-to-consumer (B2C) operations, which contributes 76.98% of revenues in the last Fiscal 2025. Its business operations other than B2C include, (i) business-to-business (B2B) operations that comprise supply of certain of its products sold through brokers to other FMCG companies, HoReCa businesses and small retailers and (ii) sale of by-products from manufacturing process such as wheat bran and chana chunni, which are used as cattle feed. As of Marach 31, 2025, it had a total 750 employees including 552 contract workers.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO of equity shares issue of 12695600 equity shares worth Rs. 408.80 cr. (at the upper cap). The IPO comprises of fresh equity shares issue worth Rs. 130 cr. (approx. 4037267 shares at the upper cap), and an Offer for Sale (OFS) of 8658333 equity shares (worth Rs. 278.80 cr. at the upper cap). The company has announced a price band of Rs. 306 – Rs. 322 per equity shares of Rs. 10 each. The issue opens for subscription on September 22, 2025, and will close on September 24, 2025. The minimum application to be made is for 46 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. The issue constitutes 31.42% of the post-IPO paid-up equity capital. From the net proceeds of the fresh equity issue, the company will utilize Rs. 60.00 cr. for repayment/prepayment of certain borrowings, Rs. 45.00 cr. for capex on setting up of a roasted gram flour and gram flour, and the rest for general corporate purposes.

The company has reserved equity shares worth Rs. 1.00 cr. for its eligible employees and offering them a discount of Rs. 30.00 per share. From the rest, it has allocated not more than 50% for QIBs, not less than 15% for HNIs and not less than 35% for Retail investors.

The joint Book Running Lead Managers (BRLMs) to this issue are DAM Capital Advisors Ltd., IIFL Capital Services Ltd., and Motilal Oswal Investment Advisors Ltd., while MUFG Intime India Pvt.  Ltd., is the registrar to the issue. Motilal Oswal Financial Services Ltd., and Sharekhan Ltd. are the syndicate members.

Having issued initial equity shares at par, the company issued further equity shares in the price range of Rs. 40.00 – Rs. 204.27 per share, between February 2009, and March 2017. It has also issued bonus shares in the ratio of 1 for 1 in March 2014, and 1 for 1 in March 2017. The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. NIL, Rs. 9.39, Rs. 10.25, and Rs. 93.04 per share. 

Post-IPO, its current paid-up equity capital of Rs. 36.37 cr. will stand enhanced to Rs. 40.41 cr. Based on the upper cap of the IPO price band, the company is looking for a market cap of Rs. 1301.22 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit, of Rs. 614.78 cr. / Rs. 27.10 cr. (FY23), Rs. 765.26 cr. / Rs. 26.99 cr. (FY24), and Rs. 855.16 cr. / Rs. 35.43 cr. (FY25). Though it posted growth in its top lines for the reported periods, its bottom line marked static earnings for FY23 and FY24, but posted higher net earnings for FY25, that has raised eyebrows. The company is operating in a high-volume, low margin segment as well as in a highly competitive and fragmented segment.

According to the management, currently the company is having its operations in Eastern regions and it will expand its reach to neighboring regions in coming two years and thereafter, it will consider PAN India expansion, based on its ongoing model of business.

For the last three fiscals, the company has posted an average EPS of Rs. 8.59 and an average RoNW of 14.26%. The issue is priced at a P/BV of 5.23 based on its NAV of Rs. 61.62 as of March 31, 2025, and at a P/BV of 3.67 based on its post-IPO NAV of Rs. 87.63 per share (at the upper cap).

If we attribute FY25 earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 36.72. Based on FY24 earnings, the P/E stands at 48.20. Thus, the issue appears fully priced. 

The company has shown PAT margins of 4.44% (FY23), 3.56% (FY24), 4.17% (FY25), and RoCE margins of 14.96%, 16.73%, 19.81%, respectively for the referred periods.

DIVIDEND POLICY:
The company has paid dividend of 13.75% for FY24 and 82.48% for FY25. It has already adopted a dividend policy in December 2024, based on its financial performance and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Patanjali Foods, and AWL Agri Business as its listed peers. They are currently trading at a P/E of 54.1, and 29.4 (as of September 18, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORD:
The three BRLMs associated with the offer have handled 69 pubic issues in the past three fiscals, out of which 16 issues closed below the offer price on the listing date.