Sawaliya Food Products
- Sawaliya Food Products is coming out with an initial public offering (IPO) of 29,02,800 equity shares in a price band Rs 114-120 per equity share.
- The issue will open on August 7, 2025 and will close on August 11, 2025.
- The shares will be listed on SME Platform of NSE.
- The face value of the share is Rs 10 and is priced 11.40 times of its face value on the lower side and 12.00 times on the higher side.
- Book running lead manager to the issue is Unistone Capital.
- Compliance Officer for the issue is Namita Singh Rathour.
Profile of the company
Sawaliya Food Products is a manufacturer and processer of dehydrated vegetables, serving leading institutional manufacturers engaged in branded packaged food industries, traders and international importers of dehydrated products. As such, it is deeply connected with the branded packaged food industry and this accounted for 66.15% of its revenue in Financial Year 2025. The company’s products find wide application as raw materials in the fast moving consumer goods (FMCG) industry, for products such as cup noodles, ready to eat noodles, pasta, soup, etc. Its main products include dehydrated carrot, dehydrated cabbage and dehydrated ring beans / beans. Over the years, it has crafted a sustainable as well as an integrated business model wherein it sources its raw materials directly from farmers to ensure that it uses absolutely natural ingredients in its products.
Since the farmers are located in close proximity to its manufacturing unit, it has an advantage of procuring desired quantity of raw materials mainly being carrots, at cost competitive prices and low logistical costs. Since, it sources raw materials directly from the farmers, it is able to offer its products at a lower range than its competitors, thereby having a unique pricing model. Additionally, its tie-ups with farmers enable it to procure vegetables, especially carrot in its warehouse, and sell the under-utilised raw materials, at higher prices in the market and gain from the fluctuation in prices of the raw materials.
All its products are produced at its manufacturing facility, located in District Dhar, Madhya Pradesh, with a production capacity of around 1500 MT for all its dehydrated products, divided into two facilities. This enables it to have an effective control over the manufacturing process and to ensure consistent quality of its products. The company operates under the guidance of its Promoters, Raghav Somani and Priya Somani, who have a long standing experience in the food dehydration and food processing industry.
Proceed is being used for:
- Funding capital expenditure requirements towards (i) purchase of new machinery and upgradation of existing machinery installed; and (ii) setting up of on-grid rooftop solar PV system of a capacity of 149.04KWp at its existing manufacturing unit
- Funding of working capital requirements
- Repayment and/or pre-payment, in part or full, of certain borrowings availed by the company
- General corporate purposes
Industry Overview
India is one of the largest populated countries in the world and is expected to continue having one of youngest populations in the world till 2030. India's food processing sector's market size is estimated to more than double to Rs 60,40,300 crore ($700 billion) in 2030 from Rs 26,49,103 crore ($307 billion) in 2023, driven by growing demand for processed products. This growth will be backed by rising population, changing lifestyle and food habits due to rising disposable income and urbanization. Growth in India is projected to remain strong at 6.3% in 2024. In 2023, India imported US$ 21 billion of processed foods and related products from all sources, while exports totaled US$ 17 billion. In the last eight years ending 2022-23, Food Processing sector has been growing at an Average Annual Growth Rate (AAGR) of around 5.35%.
India exports key processed food products such as pulses, processed vegetables, processed fruits and juices, groundnuts, guar gum, cereal preparations, milled products, alcoholic beverages, oil meals, etc. In FY25 (April-October) export of processed fruits and vegetables stood at $1,094 million, Lives stock products at $1,819 million and other processed foods stand at $2,212 million. During April-March FY24, processed fruits & Juices accounted for $682.58 million, processed vegetables accounted for $787.28 million, dairy products accounted for $272.64 million, poultry products accounted for $184.58 million, and miscellaneous processed items accounted for $1326.24 million. Exports of processed fruits and vegetables increased by 9.34% YoY in April- February (FY23-24) while exports of livestock products increased by 12.72% and exports of other processed foods increased by 6.32% during the same period. Exports of processed fruits and vegetables accounted for 8.9% of total exports in April-February (FY24) while exports of livestock products and other processed foods accounted for 18.3% and 18.7%, respectively.
Strong supply chains linking farmers to processing and markets are crucial. Lack of on-farm cooling, grading, and cold chain facilities forces farmers to sell at lower prices; total wastage ranged from 2-12% in 2022 across various food categories. Local grading and storage can boost product value, and the government is involving multiple stakeholders to strengthen the supply chain ecosystem. India’s processed food industry is projected to reach $1,274 billion by 2027, with a focus on infrastructure like cold storage, abattoirs, and food parks. The food processing sector offers investment opportunities worth $2.36 billion across 31 projects under Common Infrastructure for Industrial Parks. These projects include specialized processing units, ETPs, labs, warehouses, and logistics support. The infrastructure boosts manufacturing efficiency, ensures regulatory compliance, and enhances export capabilities.
Pros and strengths
Premier customer base leading to stability in business operations: The company has invested in establishing processes, teams and infrastructure to serve its customers, who are leaders in the FMCG industry. The company offers its products, mainly dehydrated vegetables to a leading FMCG manufacturer, who use its products to manufacture ready to eat, noodles, pastas and soups under renowned brands. Owing to its scalable manufacturing infrastructure, cost-effective raw material sourcing, quality offerings and scalable operations, the company is strategically positioned to gain from the industry tailwinds in the FMCG industry.
Flexible and diversified product portfolio: The company’s capacity to continuously diversify and develop its products, effectively supported by its strategically located manufacturing and distribution network, enables it to launch and market new products aligned to evolving consumer preferences. Its products are generally standardised in nature, however on specific requirements of its customers, it also customises its product offerings. For instance, it is in the process of developing dehydrated pumpkin and dehydrated beetroot, on special order basis for its customers. The company had initially started its operations by manufacturing dehydrated carrots, however it has scaled and expanded its operations by manufacturing dehydrated cabbage as well as French beans, solely based on the demand of its customers. Its flexible and scalable model facilitates minimal time-to-scale, and has enabled it to generate significant revenues from each of its products.
Cost efficient sourcing and locational advantage: The company’s cost efficient manufacturing and supply chain management results in a significant reduction in its operational costs. With its experience, it is able to time its procurement of raw materials source these materials at a competitive price. The location of its current manufacturing unit gives it a significant competitive cost advantage in terms of raw material sourcing, manufacturing and labour costs.
Risks and concerns
Maximum revenue comes from limited customers: The company has garnered 86.50%, 65.63% and 93.27% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. Any decrease in revenues or sales from such customer may adversely affect its business and results of operations. Further, it does not have firm commitment agreements with some of its customers. If its customers choose not to source their requirements from it, there may be a material adverse effect on its business, financial condition, cash flows and results of operations.
Business is subject to seasonal variations: The company’s business is influenced by the availability of vegetables, such as carrots, cabbage, ring beans, etc. Its production schedules are therefore dependent upon the availability of such products at cost competitive prices. While, there have been instances in the past, wherein its operations were affected by seasonal fluctuations on account of non-availability of vegetables, it cannot assure that such instance shall not occur in the future. For instance, during the Financial Year 2024, the company experienced a reduction in production of dehydrated carrot and cabbage, on account of less availability of fresh vegetables in the market, owing to seasonal fluctuation. Its business depends on the availability of fresh vegetables and any shortage of such vegetables may adversely affect its business and results of operations.
Geographical constrain: The company’s manufacturing unit and its operations are geographically concentrated in Madhya Pradesh. Consequently, it is exposed to risks from economic, regulatory and other developments in such region which could have an adverse effect on its business, results of operations and financial condition. Further, its continued operations are critical to its business and any shutdown of its manufacturing unit may adversely affect its business, results of operations and financial condition.
Outlook
Sawaliya Food Products is a manufacturer and processor of dehydrated vegetables, particularly serving the branded packaged food industry and international importers. It sources its raw materials directly from farmers, focusing on dehydrated carrots, cabbage, and string beans. Its products are used in various food applications, such as cup noodles, ready-to-eat noodles, and pasta. The company has flexible and diversified product portfolio. The company has strategically located manufacturing facility with modern infrastructure and integrated manufacturing facilities with a core focus on quality. On the concern side, the company depends on one of its key customers for a significant portion of its revenue, and any decrease in revenues or sales from such customer may adversely affect its business and results of operations. Moreover, the company derives a significant portion of its revenue from certain of its products. If sales volume or price of such products declines in the future, or if it is unable to sell such products for any reason, its business, financial condition, cash flows and results of operations could be adversely affected.
The company is coming out with a maiden IPO of 29,02,800 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 114-120 per equity share. The aggregate size of the offer is around Rs 33.09 crore to Rs 34.83 crore based on lower and upper price band respectively. On performance front, the company's revenue from operations in the financial year 2024-25 is Rs 3,418.42 lakh. This represents Rs 1,078.64 lakh or 46.10% increase compared to the previous financial year's revenue from operations of Rs 2,339.78 lakh. Moreover, the Profit After Tax (PAT) for the financial year 2024-25 reached Rs 694.57 lakh, marking a notable increase from Rs 311.96 lakh in the financial year 2023-24.
The company intends to enter new product categories viz. dried papaya, dried beetroot and dried pumpkin for its institutional customers. In accordance with this, while it seeks to continue to strengthen its existing product portfolio, it intends to further diversify into products with prospects for increased growth and profitability. It plans to continue to increase offerings in its current business segments as well as diversify into new products by tapping into segments which in the view of its management have attractive growth prospects. Its emphasis on quality of manufacture and timely delivery of its offerings have been a key factor in its ability to attract new customers and to retain its existing customers. It intends to draw on its experience, market position and ability to timely deliver quality products to successfully foray into other sectors as well as to other geographies.
