Gurunanak Agriculture India
- Gurunanak Agriculture India is coming out with an initial public offering (IPO) of 38,40,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 75 per equity share.
- The issue will open on September 24, 2025 and will close on September 26, 2025.
- The shares will be listed on SME Platform of NSE.
- The share is priced at 7.50 times higher to its face value of Rs 10.
- Book running lead manager to the issue is Finshore Management Services.
- Compliance Officer for the issue is Prachi Agrawal.
Profile of the company
Gurunanak Agriculture India is engaged the manufacturing of agricultural machinery, including Threshers, Harvesters, Reapers, Rotavators, Cultivators, and more. The company has consistently focused on delivering innovative solutions to meet the needs of the farming community. Its range of products includes Paddy Thresher, Groundnut Thresher, Wheat Thresher, Maize Thresher, Multi-crop Thresher, Harvester, Reaper, Rotavator, and others. Recently, the company has launched Combined Harvester which has not only met but exceeded customer expectations, quickly gaining widespread popularity in the market due to its advanced features, superior efficiency, and reliability. The overwhelming demand for the Combined Harvester highlights the trust and satisfaction its customers place in its brand.
To capitalize on this success and address the escalating market demand, the company is embarking on a strategic expansion of its production capabilities. The cornerstone of this project is the development of a robust manufacturing infrastructure that will enable the cumulative annual production of 300 harvesters and 4,000 threshers and 4,000 units for other products (such as rotavators, reapers, cultivators, etc). This enhancement aligns with its vision of becoming a market leader in agricultural machinery by ensuring to meet the demand efficiently while maintaining its commitment to high quality and innovation.
The decision to upscale its production is rooted in a detailed analysis of market trends, customer feedback, and operational capabilities. By increasing its manufacturing capacity, it aims to not only cater to the current demand but also position itself to seize future opportunities in the rapidly evolving agricultural sector. The investment in this expansion reflects its confidence in the long-term growth potential of the industry and its ability to deliver cutting-edge solutions.
Proceed is being used for:
- Funding capital expenditure for setting up Harvester Manufacturing Unit
- Working capital requirements
- General corporate purposes
- Meeting issue expenses
Industry Overview
India is one of the major players in the agriculture sector worldwide and it is the primary source of livelihood for 55% of India’s population. India has the world's largest cattle herd (buffaloes), the largest area planted for wheat, rice, and cotton, and is the largest producer of milk, pulses, and spices in the world. It is the second-largest producer of fruit, vegetables, tea, farmed fish, cotton, sugarcane, wheat, rice, cotton, and sugar. The agriculture sector in India holds the record for second largest agricultural land in the world generating employment for about half of the country’s population. Thus, farmers become an integral part of the sector to provide it with a means of sustenance. the Indian agricultural sector is predicted to increase to $24 billion by 2025. Indian food and grocery market is the world’s sixth largest, with retail contributing 70% of the sales. As per the First Advance Estimates for 2023-24 (Kharif only), total food grain production in the country is estimated at 148.5 million tonnes.
The Agriculture and Allied industry sector witnessed some major developments, investments, and support from the Government in the recent past. Between April 2000-March 2024, FDI in agriculture services stood at $3.08 billion. According to the Department for Promotion of Industry and Internal Trade (DPIIT), the Indian food processing industry has cumulatively attracted a Foreign Direct Investment (FDI) equity inflow of about $12.58 billion between April 2000- March 2024. This accounts for 1.85% of total FDI inflows received across industries. During 2024-25 (April-May), processed vegetables accounted for $122.91 million, miscellaneous processed items accounted for $302.07 million and processed fruits & juices accounted for $143.51 million.
The agriculture sector in India is expected to generate better momentum in the next few years due to increased investment in agricultural infrastructure such as irrigation facilities, warehousing, and cold storage. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be self-sufficient in pulses in the coming few years due to the concerted effort of scientists to get early maturing varieties of pulses and the increase in minimum support price. In the next 5 years, the central government will aim $9 billion in investments in the fisheries sector under PM Matsya Sampada Yojana. Through the Ministry of Food Processing Industries (MoFPI), the Government of India is taking all necessary steps to boost investments in the food processing industry in India. Government of India has continued the umbrella PMKSY scheme with an allocation of Rs 4,600 crore ($559.4 million) till March 2026.
Pros and strengths
Comprehensive product portfolio: The company offers a broad and diverse range of agricultural machinery that caters to the varied needs of farmers across India. This includes threshers, harvesters, reapers, rotavators, and cultivators, among other products. The company's recent introduction of the combined harvester, which has been highly successful in the market, demonstrates its ability to deliver innovative products that exceed customer expectations. By offering a comprehensive range of machinery suited to different crops and farming conditions, the company ensures it can meet the specific needs of farmers, contributing to the company’s strong market presence.
Technological innovation and research & development: Innovation is a cornerstone of its growth strategy. The company is committed to continuous research and development (R&D) to improve the efficiency, performance, and reliability of its products. The company’s in-house R&D efforts focus on developing cutting-edge solutions that address the evolving needs of the farming sector, including products that are optimized for various agro-climatic conditions. This ongoing investment in R&D enables the company to maintain a competitive edge in the market and offer farmers machinery that enhances productivity, reduces labour costs, and improves overall efficiency in farm operations.
Cost-effective and locally manufactured products: One of the company’s key competitive advantages is its ability to offer cost-effective agricultural machinery without compromising on quality. By focusing on locally manufactured products, the company is able to reduce production costs and offer competitive pricing compared to imported machinery. This affordability is crucial for Indian farmers, who are often cost-sensitive and require economical solutions to improve farm productivity. The company’s commitment to affordable pricing, combined with its high-quality manufacturing processes, makes its products highly attractive in the competitive agricultural machinery market.
Risks and concerns
Maximum revenue comes from limited customers: The company derives a significant portion of its revenue from its customer, and focusing on catering them with its products is a part of its growth strategy. The company has garnered 52.45%, 49.00% and 47.94% of its total revenue from top 5 customers in FY25, FY24 and FY23 respectively. If one or more of its customers terminate their dealings with it, whether for convenience, for default in the event of a breach by it, its business and results of operations could be adversely affected.
Geographical constrain: The company conducts all of its manufacturing operations from Durg, Chhattisgarh. The geographical concentration of operation is in East-Central India and concentration of its manufacturing facilities is in Chhattisgarh. Further its new proposed project will also be built in Durg, Chhattisgarh. Its revenue from manufacturing operations is also significantly concentrated in Chhattisgarh State. For the period ended March 31, 2025, March 31, 2024 and March 31, 2023, Chhattisgarh state accounted for 72.59%, 65.62% and 57.04% respectively. Due to the geographical concentration of its manufacturing operations and certain of its suppliers and customers in Chhattisgarh state, its operations are susceptible to local, regional and environmental factors, such as social and civil unrest, regional conflicts, civil disturbances, economic and weather conditions, natural disasters, demographic and population changes, and other unforeseen events and circumstances.
Business is subject to seasonality: The company is impacted by seasonal variations in sales volumes, which may cause its revenues to vary significantly between different quarters in a Fiscal. In Last 3 Fiscal years about 85% to 95% of the company’s revenue comes from the Threshers. The thresher industry’s cyclicality exposes it to fluctuations in the demand scenario with sensitivity to monsoons and farmer sentiments. Typically, it sees an increase in its business during the peak season i.e. August to November. The company’s results of operations and cash flows across quarters in a Fiscal may not be comparable and any such comparisons may not be meaningful or may not be indicative of its annual financial results or its results in any future quarters or periods.
Outlook
Gurunanak Agriculture India manufactures agricultural machinery such as threshers, harvesters, reapers, and rotavators. The company's products include Paddy Thresher, Groundnut Thresher, Wheat Thresher, Maize Thresher, Multi-crop Thresher, Harvester, Reaper, Rotavator. The company has strong brand reputation and customer trust. The company has advanced technological innovation and research & development. On the concern side, Substantial portion of the company’s revenues has been dependent upon few customers/dealers. The loss of any one or more of its major customers would have a material effect on its business operations and profitability. Moreover, the business is subject to seasonality. Lower revenues in the harvest time of any Fiscal may adversely affect its business, financial condition, results of operations and prospects.
The company is coming out with an IPO of 38,40,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 75 per equity share to mobilize Rs 28.80 crore. On performance front, the net revenue from operations i.e. excluding inter-branch transfer has decreased to Rs 4,385.65 lakh in FY 2024-25, from Rs 4,401.68 lakh in FY 2023-24. However, the restated Profit after Tax for FY 2024-25 increased to Rs 605.52 lakh (13.76% of total income) as against Rs 245.39 lakh in the FY 2023-24.
In a bid to meet the growing demand for agricultural machinery, the company is strategically expanding its production capacity. The company is in the process of setting up a dedicated harvester manufacturing unit, which will significantly enhance its ability to produce large quantities of harvesters and other machinery. The proposed capital expenditure of Rs 1,706.71 lakhs, financed through the upcoming Initial Public Offering (IPO), will support this expansion, ensuring that the company can cater to the increasing demand for mechanized solutions in the agricultural sector. The expansion of manufacturing facilities also includes the scaling up of existing production lines, optimizing operational efficiency, and incorporating advanced manufacturing technologies. This approach will enable the company to maintain high-quality standards while increasing output, ultimately driving growth and market penetration.
