Solvex Edibles coming with IPO to raise Rs 18.87 crore

Solvex Edibles

• Solvex Edibles is coming out with an initial public offering (IPO) of 26,20,800 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 72 per equity share.
• The issue will open on September 22, 2025 and will close on September 24, 2025.
• The shares will be listed on SME Platform of BSE.
• The share is priced at 7.20 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Corporate Makers Capital.
• Compliance Officer for the issue is Swati Vaish.

Profile of the company

Solvex Edibles is in the business of manufacturing, distribution, marketing and selling of Solvent Extracted Rice Bran Oil and other by products such as De-Oiled Cakes - Rice Bran, Rice Bran and Mustared Oil, Mustard Cakes, Deoiled Mustared Cakes. Rice bran oil is the oil extracted from the hard outer brown layer of rice called ‘Bran’.

The company is selling Solvex Extracted Rice Bran Oil Deoiled Cakes - Rice Bran, Rice Bran, Mustared Oil, Mustard Cakes and Deoiled Mustared Cakes to various FMCG companies across India. It doesn’t manufacture, market and sell its products under its own brands.

The company also produces De-Oiled Cakes Rice Bran (DORB), which is a by-product in the extraction of Rice Bran Oil and sell the same as cattle feed, poultry feed and fish feed in various states of India.

Proceed is being used for:

• Financing the Capital expenditure towards acquisition of new Plant and Machinery at existing plant of the company
• Repayment in full or in part, of certain of its outstanding borrowings
• Meeting general corporate purposes

Industry Overview

Oilseeds and edible oils are two of the most sensitive essential commodities. India is one of the largest producers of oilseeds in the world and this sector occupies an important position in the agricultural economy, accounting for the estimated production of 39.59 million tons of nine cultivated oilseeds during the year 2023-24 (November-October) as per 3rd Advance Estimates released by the Ministry of Agriculture on June 4, 2024. India contributes about 5-6% of the world oilseeds production. Export of oil meals, oilseeds and minor oils was about 3.46 million tons in the financial year 2022-23 valued at Rs. 14,609 crore. India is fortunate in having a wide range of oilseeds crops grown in its different agro climatic zones. Groundnut, mustard/rapeseed, sesame, safflower, linseed, niger seed, castor are the major traditionally cultivated oilseeds. Soyabean and sunflower have also assumed importance in recent years. Coconut is most important amongst the plantation crops.

There are some major developments, which have significantly contributed to this sector. One was the setting up of the Technology Mission on Oilseeds in 1986 which has been converted into a National Mission on Oilseeds and Oil Palm (NMOOP) in 2014. As per a decision regarding merger/ conversions or linkage of Schemes/ sub-Schemes/ programmes, etc. having similar components such as incentive for seed, demonstration, and farm implements including efficient water application tools covered under NFSM and Oil seeds was merged under revamped NFSM from the year 2018-19. This gave a thrust to Government's efforts for augmenting the production of oilseeds. This is evident by the very impressive increase in the production of oilseeds from about 11.3 million tons in 1986-87 to 41.35 million tons in 2022-23. Most of the oilseeds are cultivated on marginal land and are dependent on rainfall and other climatic conditions.

The country has to rely on imports to meet the gap between demand and supply. Import of edible oil is under Open General License. In order to harmonize the interests of farmers, processors and consumers and at the same time, regulate large import of edible oils to the extent possible, import duty structure on edible oils is reviewed from time to time. In a bid to control the continuous rise in the cooking oil prices since past one year, the Central Government has cut the basic duty on Crude Palm Oil, Crude Soyabean Oil and Crude Sunflower Oil from 2.5% to Nil. The Agri-cess on these Oils has been brought to 5%. This duty has been extended upto March 31, 2025. The basic duty on Refined Soyabean oil and Refined Sunflower Oil has been reduced to 17.5% from 32.5% and the basic duty on Refined Palm Oils has been reduced from 17.5% to 12.5%. Import Duty of Refined Soyabean oil and Refined Sunflower Oil has been reduced to 17.5% from 12.5% on June 14, 2023. This duty has been extended upto March 31, 2025.

Pros and strengths

Extensive array of products: The company’s product portfolio consists of wide range of products which differentiate it from other companies. It has product portfolio ranging from Rice Bran Oil and other by products such as De-Oiled Cakes - Rice Bran, Rice Bran and Mustared Oil, Mustard Cakes, Deoiled Mustared Cakes.

Strategic location of its manufacturing facilities: The company’s Manufacturing Facilities are situated at Kemri, District Bilaspur, Uttar Pradesh with a land area of 12140 Sq meter giving it the strategic advantage to supply and distribute its products across various states in India.  

Easy availability of raw material around its manufacturing facilities: Rice bran oil and mustard oil are extracted from the hard outer brown layer of rice called bran and Mustard Cakes. There are various mills which are situated near its Manufacturing Facilities ensuring the supply of raw material to it on regular basis. Uttar Pradesh is the second largest rice producing area and therefore rice bran is easily available at competitive prices. The ease of availability of raw material in abundance, which is its main raw material, ensures the smooth operations of its Manufacturing Facilities, and production and sale of its finished products.

Risks and concerns

Maximum revenue comes from limited customers: For the period ended March 31, 2024 and March 31, 2025, its revenue from operations from its top 10 customers contributed to 58.29% and 41.16% respectively. The company’s reliance on a limited number of customers for its business exposes it to risks, that may include, but are not limited to, reductions, delays or cancellation of orders from its significant customers, a failure to negotiate favourable terms with its key customers or the loss of these customers, all of which would have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of the company.

Major revenue comes from sale of Rice Bran Oil and De Oiled Rice Bran: The company derives a significant portion of its revenue from the sale of Rice Bran Oil. The company has garnered 33.43%, 42.51% and 29.99% of its total revenue from Rice Bran Oil in FY25, FY24 and FY23 respectively on standalone basis. Moreover, the company has garnered 65.34%, 56.88% and 40.64% of its total revenue from De Oiled Rice Bran in FY25, FY24 and FY23 respectively. Consequently, any reduction in demand from the consumers of Rice Bran Oil and De Oiled Rice Bran or lack of preference for Rice Bran Oil and De Oiled Rice Bran could have an adverse effect on its business, results of operations and financial condition.

Geographical constrain: The company’s business operations are majorly concentrated in Uttar Pradesh. The company has garnered 87.01%, 48.38% and 58.89% of its revenue from Uttar Pradesh in FY25, FY24 and FY23 respectively. Due to the geographical concentration of its manufacturing operations in Uttar Pradesh, its operations are susceptible to local, regional and environmental factors. Any adverse developments affecting its operations in these regions could have a significant impact on its revenue and results of operations.

Outlook

Solvex Edibles is engaged in the business of manufacturing, distribution, marketing and selling of Solvent Extracted Rice Bran Oil and other by products such as De-Oiled Cakes - Rice Bran, Rice Bran and Mustared Oil, Mustard Cakes, Deoiled Mustared Cakes. The company has extensive array of products with strategic location of the manufacturing facilities. On the concern side, the company’s revenues have been significantly dependent on few customers and its inability to maintain such business may have an adverse effect on its results of operations. Moreover, the company derives significant portion of its revenues from Rice Bran Oil and any reduction in demand or in the production of such products could have an adverse effect on its business, results of operations and financial condition.

The company is coming out with an IPO of 26,20,800 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 72 per equity share to mobilize Rs 18.87 crore. On performance front, the net revenue from operations has increased to Rs 7470.61 lakh in FY 2024-25, up from Rs 7127.43 lakh in FY 2023-24, an increase of 4.81%. Moreover, the company’s net profit surged almost three-fold to Rs 283.86 lakh in FY25 as compared to Rs 98.99 lakh in FY24.

The company intends to expand its geographical reach and enter the large domestic market for growth opportunities of its business. Currently, it has presence in the state of Uttar Pradesh, Maharashtra, Haryana, Delhi, Madhya Pradesh, Uttrakhand, West Bengal, Rajasthan, Punjab, Gujrat, Telangana, Orissa, Chattisgarh, Karnataka, Bihar, Assam, Andhra Pradesh and Tamil Nadu and it plans to deepen its presence in the existing market and expand its reach and penetrate into the large available market by giving scale down low-price solution and grab major market share.