Shivashrit Foods Makes Modest Debut with 5% Premium, Meeting Market Expectations

Shivashrit Foods Limited, the potato flakes manufacturer and exporter, made a modest debut on NSE SME on September 1, 2025. After closing its IPO bidding between August 22-26, 2025, the company commenced trading with a 5% premium at ₹148.50, later hitting the lower circuit, meeting initial market expectations but reflecting cautious investor sentiment towards the food processing sector.

Shivashrit Foods Listing Details

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Shivashrit Foods Limited IPO launched at ₹142 per share with a minimum investment of 2,000 shares costing ₹2,84,000. The IPO received a moderate response with a subscription of 2.89 times - NII leading at 5.16 times, individual investors at 2.65 times, and QIB at 1.59 times, indicating mixed investor interest across categories in the potato processing business.

First-Day Trading Performance Outlook

• Listing Price: The Shivashrit Foods share price opened at ₹148.50 on NSE SME, representing a premium of 4.6% from the issue price of ₹142, delivering modest gains for investors before hitting the lower circuit later in the session.

Growth Drivers and Challenges

Growth Drivers:

• Strong Financial Performance: Revenue increased by 36% to ₹105.85 crore in FY25 with PAT rising by 4% to ₹12.06 crore, reflecting robust demand for potato flakes and successful market expansion strategies.
• Global Export Presence: Exports products to 15 countries, including Argentina, Brazil, the  USA, Malaysia, and Turkey, providing geographic diversification and international revenue streams beyond domestic markets.
• Quality Certifications: Manufacturing facility certified by FSSAI, ISO 22000:2018, HALAL, BRCGS, and USFDA, ensuring compliance with international quality standards and market access.
• Strategic Location Advantage: Manufacturing unit in Aligarh, Uttar Pradesh, strategically positioned for potato procurement with government policy benefits and subsidies for food processing units.

Challenges:

• High Debt Burden: Debt-to-equity ratio of 1.39 with total borrowings of ₹47.96 crore, creating significant financial leverage concerns affecting cash flow generation capabilities.
• Modest Profit Growth: PAT growth of only 4% despite a 36% revenue increase indicates margin pressures and cost management challenges in the competitive food processing market.
• Small Scale Operations: Relatively small revenue base of ₹105.85 crore, potentially restricting competitive positioning against larger food processing companies in global markets.
• Volatile Market Performance: Immediate post-listing decline to lower circuit indicates investor concerns about business prospects and valuation sustainability.

Utilisation of IPO Proceeds

• Capacity Expansion: ₹26.30 crore for capital expenditure towards an expansion project t enhance production capabilities and market presence in the potato processing sector.
• Working Capital Requirements: ₹19 crore for funding working capital needs for the expansion project, supporting increased production and business operations.
• General Corporate Purposes: ₹9.19 crore for general corporate purposes supporting business operations and strategic initiatives in the food processing sector.

 Financial Performance of Shivashrit Foods

• Revenue: ₹105.85 crore for FY25, showing strong growth of 36% from ₹77.55 crore in FY24, reflecting robust demand for potato flakes and successful market expansion.
• Net Profit: ₹12.06 crore in FY25, representing modest growth of 4% from ₹11.61 crore in FY24, indicating margin pressures despite revenue growth.
• Financial Metrics: Strong ROE of 42%, impressive ROCE of 42.73%, high debt-to-equity ratio of 1.39, solid RoNW of 34.85%, healthy PAT margin of 11.51%, robust EBITDA margin of 22.06%, reasonable Price to Book Value of 1.91, and market capitalisation of ₹259.42 crore.