Shreeji Global FMCG NSE SME IPO review

•    The company is engaged in the business of manufacturing and marketing of agri products that include spices, grains, seeds, pulses and Atta.
•    It has entered in to wholesale market for B2B segment and D2C to widen its scope.
•    The company marked growth in its top lines for reported periods, but quantum jump in bottom lines in pre-IPO years raise eyebrows and concern over its sustainability.
•    Based on its inflated recent earnings, the issue appears aggressively priced. 
•    The company is operating in a highly competitive and fragmented segment.
•    There is no harm in skipping this pricey and dicey issue that is termed as “High Risk/Low Return”.

ABOUT COMPANY:
Shreeji Global FMCG Ltd. (SGFL) is engaged in, the manufacturing and processing of ground & whole spices, seeds, grains & pulses and Atta (Flour). Its products marketed under brand name “SHETHJI” and under white label (customers logo). Its product portfolio includes a wide range of whole spices, ground spices, oilseeds, flour and pulses, which are processed at its facility using standardized techniques. The company is engaged in the manufacturing of Ground (powdered) spices through a structured sequence of cleaning, grading, sorting, and grinding, aimed at delivering a consistent and stable range of spice powders & seed. SGFL’s product line includes chana, cumin seeds (jeera), coriander seeds, sesame seeds, groundnut, kalonji seeds, fennel seeds, coriander powder, red chilli powder, and turmeric powder etc. Each of these products is handled under defined quality parameters to ensure uniformity in texture, aroma, and shelf life. This integrated process flow enables it to deliver both raw, processed and value-added agro-products under own brand, catering to various customer needs in retail and bulk segments.

In parallel with its branded product line, the company is also involved in the supply of whole spices and food grains, which are sold with client brand (white label) in different size of bulk quantities for the customers having own distribution channel. While its primary focus remains on manufacturing and processing, it also imports certain agri commodities such as wheat, cumin seeds, and coriander from other countries to meet raw material requirements. These imported products include Madagascar Cloves and Coriander seeds from UAE, Reduced FAT Desiccated Coconut from SriLanka, Autumn Star Anise, Cigar Cassia, Broken Cassia, Split Cassia from Vietnam and Milling Wheat (Non-GMO, Crop 2023) from Singapore which are then processed at its in-house facilities to ensure consistency and quality. 

Based on market and client requirements, the final products are offered either under own brand or in unbranded bulk packaging. This import-driven sourcing strategy helps it maintain a steady supply of key ingredients and meet the varying needs of customers across different markets. This also enables the company to serve a wider segment of the market including wholesalers, retailers, institutional buyers and regional distributors. Its operations are supported by a supply chain that includes sourcing, processing, grinding, packaging and distribution. Through coordinated logistics and a focus on timely delivery, it is able to meet client requirements across different business segments.

The customer base it serves ranges from individual traders and small businesses to larger corporate entities, reflecting its ability to adapt to varying order volumes and specifications. SGFL’s approach is cantered on maintaining transparency in transactions, consistency in supply, and responsiveness to client needs. Over time, it has expanded offerings & product range to include spices, grains, oilseeds, pulses, spices powder & wheat flours, allowing it to operate within multiple categories of agricultural commodities. While its focus remains on the domestic market, the company is also evaluating opportunities in export-driven channels to diversify reach.

Additionally, it operates two branch offices within key Agricultural Produce Market Committees (APMCs) in Rajkot and Gondal. These branches provide it with direct market access, enhanced bargaining power, and lucrative sourcing advantages, allowing it to procure raw materials at competitive rates. All its locations are well-connected to major transportation and logistics networks, facilitating the timely procurement of raw materials and efficient distribution of finished goods. This comprehensive infrastructure empowers it to maintain high standards of quality, support increasing production capacities, and cater effectively to both domestic and international market demands.

The Company forayed into the e-commerce segment in the financial year 2019-20 with the intention of expanding its reach to retail consumers through online platforms. However, the contribution from online sales has remained very limited and negligible during the period under review, as the management’s strategic focus and resources were primarily directed towards expanding the export business. Consequently, the bifurcation of total operating income between online and offline sales is not available, given the insignificant share of online sales. Further, in the financial year 2024-25, the Company has not undertaken any online sales activities. The Company is currently evaluating opportunities to strengthen its digital presence and streamline e-commerce operations to tap into the growing online demand for agri-based and related products.

The new product segment will focus on producing value-added items such as blended spices tailored to diverse regional tastes and millet-based multigrain flours designed to meet the rising demand for health-conscious, convenient food alternatives. These products will cater to both the rapidly expanding Direct-to-Consumer (D2C) market and international export markets, where the demand for nutritious, clean-label, and sustainable food products is witnessing significant growth. As of August 31, 2025, it had 43 employees on its payroll and additional 60 contract workers for various departments.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building IPO of 6800000 equity shares of Rs. 10 each to mobilize Rs. 85.00 cr. (at the upper price band). It has announced a price band of Rs. 120 – Rs. 125 per share of Rs. 10 each. The IPO opens for subscription on November 04, 2025, and will close on November 07, 2025. The minimum application to be made is for 2000 shares and in multiple of 1000 shares thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 29.88% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 5.67 cr. for capex on factory premises, Rs. 29.01 cr. for capex on plant and machinery of cold storage, Rs. 4.25 cr. for capex on solar power plant, Rs. 33.54 cr. for working capital, and the rest for general corporate purposes

The IPO is solely lead managed by Interactive Financial Services Ltd., while MUFG Intime India Pvt. Ltd., is the registrar to the issue. B N Rathi Securities Ltd., and SVCM Securities Pvt. Ltd. are the market makers. B N Rathi Securities Ltd. is the syndicate member.

Having issued initial equity shares at par value, the company issued further equity shares in the price range of Rs. 12.71 – Rs. 14.34 per share between August 2022 – March 2024. It has also issued bonus shares in the ratio of 18 for 10 in August 2024. The average cost of acquisition of shares by the promoters is Rs. 4.23, and Rs. 4.24 per share.

Post-IPO, company’s current paid-up equity capital of Rs. 15.96 cr. will stand enhanced to Rs. 22.76 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 284.50 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total revenue/Net Profit of Rs. 468.70 cr. / Rs. 2.05 cr. (FY23), Rs. 589.00 cr. / Rs. 5.47 cr. (FY24), and Rs. 650.85 cr. / Rs. 12.15 cr. (FY25). For 5M of FY26 ended on August 31, 2025, it earned a net profit of Rs. 9.20 cr. on a total revenue of Rs. 251.18 cr. The company marked growth in its top and bottom lines for the reported periods. However, quantum jump in bottom lines from FY 25 onwards (i.e., pre-IPO period) appears to have been inflated for fancy valuations. Higher trade receivables for the reported periods raises concern.

For the last three fiscals, the company has reported an average EPS of Rs. 5.30, and an average RoNW of 27.20%. The issue is priced at a P/BV of 5.15 based on its NAV of Rs. 24.28 as of August 31, 2025, and at a P/BV of 2.30 based on its post-IPO NAV of Rs. 54.38 per share (at the upper cap).

If we attribute its FY26 super annualized earnings on post-IPO expanded equity base, then the asking price is at a P/E of 12.89, and based on its FY25 earnings, the P/E stands at 23.41. Thus, based on its recent inflated financial data, the issue appears aggressively priced.

The company has posted PAT margins of 0.44% (FY23), 0.93% (FY24), 1.87% (FY25), 3.67% (5M-FY26) and RoCE Margins of 11.93%, 23.82%, 32.07%, 19.59% respectively for the referred periods. 

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per offer document, the company has shown Sheetal Universal, Madhusudan Masala, as its listed peers. They are currently trading at a P/E of around 17.4, and 15.5 (as of October 30 2025).  However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORDS:
This is the 21st mandate from Interactive Financial in the last three fiscals (including the ongoing one). Out of the last 14 listings, 4 opened at discount, and the rest with premiums ranging from 1.10% to 90.00% on the date of listing. The Lead Manager has an average track record.