SSMD Agro BSE SME IPO review (Not Rated)

•    The company is engaged in the manufacturing, trading, repacking wide range of agro food products. 
•    It is marketing its products under the brand name of “Manohar Agro”, “Super S S “, “Delhi Special”, and “Shri Dhanlaxmi”.
•    The company marked growth in its top and bottom lines for the reported periods, but the sudden boost in bottom lines from FY25 onwards raises eyebrows.
•    It is operating in a highly competitive and fragmented, as well as high volume – low margin segment.
•    There is no harm in skipping this pricey and dicey issue from average Lead Manager.

PREFACE:
While the offer document has many lacunas in its financial and other details, this company is up for another surprise. It announced an IPO with a price band of Rs. 114 – 120 per share of Rs. 10 each with a time line of November 24 – November 26, 2025. But it has announced the change in price band to Rs. 114 – Rs. 121 with a changed time line of November 25 – November 27, 2025. This indicates half-hearted work of Lead Manager. The revision in its price upward at the upper price band is a big shock as this keeps its IPO aggressively priced with its super pre-IPO period performance and posting higher margins compared to general trends of the industry. This segment is a high volume - low margin. With inflated net profits from FY25 onwards, it has paved the way for higher valuations.

ABOUT COMPANY:
SSMD Agrotech India Ltd. (SAIL) erstwhile known as House of Manohar which had two separate proprietorship firms, has consolidated its business to finally become SSMD Agrotech India Ltd.  

SAIL is operating under the Umbrella Brand name of “House of Manohar” is a rapidly growing player in the market. The company is engaged in the manufacturing, trading, and repacking of a wide array of high-quality agro-food products. SSMD Agrotech operates under four primary sub-brands: Manohar Agro, Super S.S., Delhi Special, Shri Dhanlaxmi. It is an ISO 9001:2015 certified organization for Quality Management System, ISO 14001:2015 for Environmental Management System, ISO 22000:2018 for Food Safety Management System, ISO 45001:2018 for Occupational Health and Safety Management System. The company consistently sources high-grade raw materials at manufacturing facilities to maintain rigorous standards and deliver quality products.

House of Manohar operates a comprehensive business model that combines traditional distribution networks with modern, consumer-focused innovations. The company focuses on delivering quality food products to meet diverse customer demands while maintaining a robust supply chain and leveraging cutting-edge technology. HOM, House of Manohar, An Umbrella brand of the Manohar Group has adopted a transformative Direct-to-Consumer model. In alignment with evolving consumer preferences for speed, quality and convenience, HOM’s D2C Strategy eliminates traditional distribution layers and directly engages with consumers through an innovative delivery model. At the core of the strategy lies the concept of “Dark Unit Factories”. As of September 30, 2025, it had 49 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 2817000 equity shares of Rs. 10 to mobilize Rs. 33.80 cr. at the upper cap. The issue opens for subscription on November 25, 2025, and will close on November 27, 2025. The company has announced a price band of Rs. 114 – Rs. 121 per share. The minimum number of shares to be applied is for 2000 shares and in multiples of 1000 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 32.50% of the post-IPO paid-up capital of the company. From the net proceeds, the company will utilize Rs. 6.83 cr. for repayment/prepayment of certain borrowings, Rs. 2.03 cr. for capex on setting up of new D2C dark store factories, Rs. 0.97 cr. for capex on purchase of machinery for setting up of Namkeen Plant, Rs. 13.10 cr. for working capital, and the rest for general corporate purposes. 

The company has reserved 5.54% for Market Maker, and from the rest, it has allocated 1.02% for QIBs, 49.45% for HNIs, and 49.53% for Retail investors

The IPO is solely lead managed by 3Dimention Capital Services Ltd., and Bigshare Services Pvt. Ltd., is the registrar to the issue. Nikunj Stock Brokers Ltd. is a market maker as well as a syndicate member.

After issuing initial equity shares at par value, the company converted further equity shares at a fixed price of Rs. 29 per share in April 2024. It has also issued bonus shares in the ratio of 10 for 1 in April 2025. The average cost of acquisition of shares by the promoters is, Rs. 0.79, Rs. 2.62, and Rs. 12.72 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 5.85 cr. will stand enhanced to Rs. 8.67 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 104.86 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue/net profit/ - (loss), of Rs. 48.62 cr. / Rs. – (0.001) cr. (FY23), Rs. 73.45 cr. / Rs. 1.10 cr. (FY24), and Rs. 99.18 cr. / Rs. 5.38 cr. (FY25). For H1 of FY26 ended on September 30, 2025, it earned a net profit of Rs. 3.84 cr. on a total revenue of Rs. 52.13 cr. It posted growth in its top and bottom lines for the reported periods. Its higher PAT margins from FY25 onwards not only raise eyebrows, but also concern over its sustainability going forward, as it is operating in a highly competitive and fragmented segment. 

For the last three fiscals, the company has reported an average EPS of Rs. 7.65 and an average RoNW of 73.33%. The issue is priced at a P/BV of 9.65 based on its NAV of Rs. 12.54 as of March 31, 2025, but its post-IPO NAV data is missing from offer documents, but its IPO ad erroneously showing its post IPO NAV of Rs. 120 (i.e., the upper price band value).

If we attribute FY26 annualized super earnings on post-IPO fully diluted equity capital, then the asking price is at a P/E of 13.67. Based on FY25 earnings, the P/E stands at 19.49. The issue relatively appears aggressively priced. 

For the reported periods, the company has posted PAT margins of – (0.01) % (FY23), 1.50% (FY24), 5.42%, (FY25), 7.36% (H1-FY26), and RoCE margins of 30.85%, 109.78%, 100.85%, 46.84%, respectively for the referred periods. 

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

COMPARISION WITH LISTED PEERS:
As per the offer document, the company has shown HOAC Foods, Contil India, and Jetmall Spices., as its listed peers. They are currently trading at a P/E of 43.9, 19.4, and NA (as of November 21, 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:
This is the 3rd mandate from 3Dimension Capital in the last two fiscals.  From the last 2 listings so far, 1 listed at discount and the 1 with premium of 9.27% on the listing date. Thus, it has an average track record.