Stanbik Agro
- Stanbik Agro is coming out with an initial public offering (IPO) of 40,92,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 30 per equity share.
- The issue will open on December 12, 2025 and will close on December 16, 2025.
- The shares will be listed on SME Platform of BSE.
- The share is priced at 3.00 times higher to its face value of Rs 10.
- Book running lead manager to the issue is Grow House Wealth Management.
- Compliance Officer for the issue is Pooja Manthan Pate.
Profile of the company
Stanbik Agro carries on the business of contract farming, wholesaling and supplying of agricultural commodities. The company was founded with a clear mission: to bring the fresh fruits and vegetables directly from the farm to the table while promoting sustainable farming practices. The company has earned a reputation as the reliable supplier of these products. The company’s experience, expertise, and commitment to its core values of freshness and quality has led to consistency & customer satisfaction.
Historically, the company’s operations included trading in pulses and cereals under the management of the previous promoters. After the induction of the current promoters, who have expertise in trading of fruits and vegetables, the company has shifted its focus to these segments. This strategic change allows it to concentrate on higher-margin products and leverage the promoters’ experience in production and distribution. The company undertook a phased expansion by discontinuing trading of cereals and pulses in FY 2023-24 and commencing the fruits trading vertical in FY 2024-25 to focus on long-term sustainability. The company undertook a phased expansion by discontinuing trading of cereals and pulses in FY 2023-24 and commencing the fruits trading vertical in FY 2024-25 to focus on long-term sustainability. Currently, the company is engaged in the trading of both fruits and vegetables.
The company finalizes contract farming agreements only after ensuring key conditions are favourable, such as assessment of the land’s past yield, availability of adequate water resources, presence of proper boundaries or demarcation, verification of soil quality suitable for cultivation, and securing rights for production and sale of the produce. Under the contract farming arrangement, the company takes the land on lease from the farmer and undertakes all cultivation and production activities. In consideration, 10% of the agricultural produce from the leased land is provided to the land owners. All risks and rewards associated with the agricultural operations and output belong entirely to the company. The company undertakes year-round cultivation, and in case of loss due to rain or natural calamities, such loss is borne by the company, though no such instance has occurred in the past. The company has exclusive rights to use the leased land, and the agreement is renewed annually based on mutual consent and prevailing conditions.
Proceed is being used for:
- Expansion of its retail network by launching new retail outlets
- Brokerage charges
- Security deposits
- Meeting the working capital requirement
- General corporate purpose
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. Consumer spending in India will return to growth in 2021 post the pandemic-led contraction, expanding by as much as 6.6%. The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year due to its immense potential for value addition, particularly within the food processing industry.
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. The first advance estimate for FY25 indicated a food grain production of around 165 million metric tons. In FY24, India produced over 332 million metric tons of food grains. The total Kharif foodgrain production for 2024-25, according to the First Advance Estimates, is projected at 1647.05 Lakh Metric Tonnes (LMT), marking an increase of 89.37 LMT from the previous year and 124.59 LMT above the average Kharif foodgrain production. Rabi crop area has from 709.09 lakh hectares in 2022-23 to 709.29 lakh hectares in 2022-23. In 2022-23 (as per the second advance estimate), India's horticulture output is expected to have hit a record 351.92 million tonnes (MT), an increase of about 4.74 million tonnes (1.37%) as compared to the year 2021-22. The Agriculture and Allied industry sector witnessed some major developments, investments, and support from the Government in the recent past. Between April 2000-September 2024, FDI in agriculture services stood at Rs. 26,836 crore ($3.11) billion.
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. The government is targeting to raise fish production to 220 lakh tonnes by 2024-25. Going forward, the adoption of food safety and quality assurance mechanisms such as Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP), and Good Hygienic Practices (GHP) by the food processing industry will offer several benefits.
Pros and strengths
Contract farming expertise: Building relationships with farmers gives it more control over farming techniques, crop quality and sustainable agricultural practices. This benefits producers and customers alike by encouraging farming and producing higher quality produce.
Product quality: The company’s emphasis on delivering fresh fruits and vegetables, positions it as a trusted provider for both bulk buyers and end consumers. This commitment to quality is not merely a business strategy; it is the cornerstone of its operations. By maintaining quality control across the supply chain, it ensures that the freshness and nutritional value of its products remain intact from farm to table. The result is not only a superior product but also enhanced consumer trust and satisfaction, which are essential for long-term success in today’s health-conscious marketplace. As it continues to prioritize these standards, it reaffirms its position as a reliable source for high quality agricultural products.
B2B and B2C synergies: The interplay between B2B and B2C trading models creates synergies that enhance a company's operational versatility. Expertise in both segments allows the company to adeptly address the diverse needs of wholesale buyers, retail chains, and individual consumers. B2B buyers benefit from bulk quantities, competitive pricing structures, and a consistent supply chain that ensures their inventory needs are met reliably. Conversely, B2C consumers experience the advantage of accessing fresh, high-quality produce through modern retail channels.
Risks and concerns
Concentrated revenue and procurement exposure: The company is extremely dependent on its top 5 customers. The company’s top five customers contributed 51.90%, 76.37%, 97.61% and 70.75% of its sales for the financial year 2024-25, 2023-24, 2022-23 and for the six months ended September 30, 2025 respectively, whereas its top 5 suppliers contributed 56.95%, 75.22%, 22.43% and 78.26% of its purchase for the financial year 2024-25, 2023-24, 2022-23 and for the six months ended September 30, 2025 respectively. Any disruption of supply of raw materials from suppliers or loss of any of its top 5 customers will adversely affect its operations and financial position.
Limited industry relationships of promoters pose business risk: The company is promoted by Ashokbhai Dhanaji Prajapati and Chirag Ashokbhai Prajapati. While Ashokbhai Dhanaji Prajapati has been involved in the industry since 2002. Investors and stakeholders may exercise caution when evaluating businesses as promoters may lack broader experience and established networks that seasoned entrepreneurs typically possess. Established entrepreneurs often benefit from extensive industry relationships and access to critical resources, which can facilitate partnerships, collaborations, and financing opportunities essential for growth. Accordingly, there can be no assurance that the limited experience or networks of its promoters will not adversely affect its business operations, financial condition, or growth prospect.
Agriculture cycle dependence creates revenue fluctuations: The company is engaged in the business of contract farming, wholesaling and supplying of agricultural commodities. The supply of product and sales volumes fluctuates based upon agricultural cycles, weather patterns, and market demand. The availability of fruits and vegetables is primarily influenced by traditional crop seasons in India, with a significant dependence on monsoon rainfall. Any variation in the timing, intensity, or distribution of rainfall can impact the supply chain, leading to irregular product availability and price volatility. It recognizes revenue upon the sale of its products, and historically, trading volumes tend to be lower during harvesting and planting seasons, with increased sales activity occurring afterward. During periods of lower sales, it continues to incur operating expenses, which may not be offset by corresponding revenue, thereby impacting its profitability and cash flow.
Outlook
Stanbik Agro is engaged in the manufacturing, wholesaling, and supply of agricultural commodities, with a focus on delivering fresh fruits and vegetables directly from farm to table. The Company emphasizes sustainable farming practices, consistency, and quality to ensure customer satisfaction. The company is engaged with farmers to cultivate crops such as sesame, cumin, and cotton based on land suitability. On the concern side, the company is heavily dependent on certain suppliers and customers for procurement and sale of its traded goods. Any disruption in supply or offtake from such entities may affect its business operations. Moreover, the company is promoted by first generation entrepreneurs, and their limited experience and industry networks may affect its business growth and prospects.
The company is coming out with an IPO of 40,92,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 30 per equity share to mobilize Rs 12.28 crore. On performance front, the company’s revenue from operations surged by 97.68%, rising from Rs 2655.04 lakh in FY 2023-24 to Rs 5248.51 lakh in FY 2024-25. This substantial increase is attributed to expansion of the business in the retail segment by opening 7 retail outlets and the acquisition of the partnership firm “Jay Chamunda Trading Co.” The company’s PAT increased by 102.00%, growing from Rs 185.07 lakh in FY 2023-24 to Rs 373.82 lakh in FY 2024-25.
Expanding market presence is a critical component of its business strategy, as it targets growth in new markets. Its approach involves a dual focus on both B2B and B2C segments, in B2C segment company aims to expand its market presence by opening 20 new retail outlets out of the issue proceeds ensuring that it effectively caters to diverse customer needs while maximizing its overall reach. It also aims to expand B2B and B2C segment by infusing additional working capital out of issue proceeds. It will enhance its distribution capabilities and improve accessibility for its products across various channels. Simultaneously, it recognizes the importance of maintaining a robust connection with consumers through modern retail channels. By integrating these two approaches, it can ensure that its offerings resonate with both businesses and end-users alike, ultimately driving sustained growth and reinforcing its market presence in an increasingly competitive landscape. The company is also strengthening its position on large-scale B2B e-commerce platforms, which will help it to expand its business operations.
