Farm Peace coming with IPO to raise Rs 32 crore

Farm Peace 

• Farm Peace is coming out with an initial public offering (IPO) of 54,24,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 59 per equity share.
• The issue will open on September 01, 2026 and will close on September 03, 2026.
• The shares will be listed on SME Platform of BSE.
• The share is priced at 5.9 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Socradamus Capital.
• Compliance Officer for the issue is Dharaben Chirag Patel.

Profile of the company

Farm Peace is an integrated contract farming company specializing in processed-grade potato varieties like Santana, Frysona, Innovators, Lady Rosetta, and Chipsona, supplying processing companies for manufacturing French fries, chips, and other potato-based products. It offers comprehensive support to farmers, including seed selection, soil preparation, irrigation, pest management, and harvesting guidance. By aligning with regional agro-climatic conditions, it helps farmers adopt suitable varieties, boosting productivity and reducing post-harvest losses. Its buy-back arrangements and technical consultancy ensure a stable supply chain, improving farmer income and strengthening the processed potato value chain. Its story began in October 2021 with a simple idea: to build a farming model that reduces uncertainty for farmers while ensuring consistent, quality raw material for processors. From the start, it chooses to focus on processing grade potato varieties which in turn are the key ingredients for frozen products like French fries, potato chips, and other value-added products.

It operates primarily in Gujarat, India, under the ‘Farm Peace’ brand cultivating over 5,660 acres and producing 61,680 metric tonnes of potatoes annually. Supported by its proprietary Farm Peace mobile application, it ensures transparency, traceability, and efficiency across the entire crop cycle. With a dedicated team and strong farmer partnerships, it has been executing large-scale farming contracts for processors in sectors such as frozen foods, quick service restaurants and snack manufacturing, while embedding sustainability at the core of its operations. 

It operates over a structured buy-back model under which it provides farmers with certified seed varieties, agronomic support, and technical assistance throughout the life cycle of growing the processed-grade potatoes, while assuring them of buying their produce at pre-agreed prices. By combining traditional farming practices with modern agricultural techniques and digital tools, it helps them improve yield quality, reduce post-harvest losses, and ensures consistent supply of quality raw material for processing applications. 

Proceed is being used for:

• Funding its incremental working capital requirements.
• General corporate purposes.

Industry Overview

Contract farming in India has emerged as a significant mechanism to strengthen the agricultural sector, enhance productivity, and create structured frameworks for farmer-market linkages. As of now, between 1 - 2% of the total agricultural land is under contract farming and it is expected to increase in the coming years steadily. It acts as a vital bridge between smallholder farmers and markets, offering opportunities for inclusive growth. Currently, the trend in contract farming is on the rise; however, its growth is not as rapid as anticipated due to gaps in communication regarding its benefits and various challenges that persist. Despite these challenges, the Indian government has recognised the potential of contract farming to address issues such as price volatility and market access for farmers. Moreover, there is a growing demand for high-value crops in India, which encourages agribusiness firms to engage in contract farming. Companies are increasingly looking to secure reliable sources of raw materials while providing farmers with access to better inputs and technology. However, the successful implementation of contract farming requires addressing existing barriers such as lack of awareness among farmers, inadequate access to financial services, and the need for improved bargaining power.

Indian market for contract farming is estimated to be valued at $7.0 billion in FY 2025. During the time FY 2021-25, the Indian market for contract farming has increased by a CAGR of nearly 6.7%. Despite agriculture playing an important role in national economy, the penetration of contract farming in India is very limited. Factors ranging from marginalized / fragmented nature of the industry to need for regulations have all prevented the growth of contract farming in India. Going ahead, the industry is expected to reach a value of $9.7 billion by FY 2030, registering a CAGR of 6.8% between FY 2025 and 2030. 

Supportive policies and government programmes play a crucial role in driving the food processing sector forward. In India, initiatives such as the Pradhan Mantri Kisan Sampada Yojana (PMKSY), subsidies for food processing units, and the establishment of mega food parks encourage investment and modernization in the sector. Specific schemes supporting potato farmers and processors, including cold storage infrastructure and export promotion, have directly benefited the processed potato value chain. Governments also promote food safety and quality standards, which enhance the credibility of local products in export markets. In addition, trade agreements and incentives are opening new avenues for processed food exports, especially for potato-based products in high-demand regions like the Middle East and Southeast Asia. By ensuring farmer–industry linkages, the government helps stabilize raw material supply while boosting employment in rural areas. 

Pros and strengths

Contract farming model with 100% buy-back assurance: By implementing a 100% buyback model, it ensures that every farmer it work with has a guaranteed market for their produce, eliminating the uncertainty and financial stress caused by fluctuating market conditions. This model empowers farmers to focus entirely on maximizing productivity and improving Potatoes quality, knowing they have a secure outlet for their harvest. The fixed pricing component is a game-changer for farmers, as it protects them from market volatility and provides a predictable income. This allows them to plan their expenses, reinvest in their farms, and gradually improve their standard of living. By fostering transparency, these arrangements help build long-term trust and partnerships with its farmers. A critical part of its model is ensuring that farmers have access to the best resources to optimize their yields. It provides hybrid seeds, fertilizers, and other essential inputs that are selected based on research into soil types, climatic conditions, and potatoes suitability. By delivering these inputs directly to the farmers, it saves them the time and effort of sourcing materials themselves, ensuring they have what they need to succeed. This end-to-end support significantly reduces their dependency on external and often unreliable suppliers. 

Agro-climatic advantage of Gujarat for processing-grade potato cultivation: It cultivates and procures processing-grade potatoes in the districts of Sabarkantha, Aravalli, Mehsana and Banaskantha. These regions provide loamy soil and a Rabi season with cool and dry weather, which are favourable for potato cultivation. The climatic cycle, including low humidity during tuber maturity, dry harvesting conditions, and moderate soil temperatures during the bulking stage, supports the production of potatoes with characteristics required for processing. The ability to operate in such regions enables it to meet specifications for varieties used in products such as French fries, chips, and other processed potato items. 

Strong and Expanding Farmer Network and Building long lasting relationship: Since its incorporation, it has developed and maintained a structured network of farmers through its seasonal buy back business model. Under this arrangement, it supplies certified seeds, provides agronomic and technical guidance, and procures the harvested produce at pre-determined prices. This framework not only helps farmers manage pricing and market risks but also ensures that it has a reliable source of quality produce to meet its operational requirements. Over the years, its engagement with farmers has grown steadily. The area under cultivation has expanded from around 1,400 acres with a production of 23,000 metric tonnes in FY 2023 to around 5,660 acres with a production of 61,680 metric tonnes in FY 2026, with the active participation of more than 800 farmers. This growth reflects the effectiveness and scalability of its farmer partnership model.

Risks and concerns

Absence of formal farmer contracts: There can be no assurance that its past experience of successfully procuring potatoes through informal arrangements with farmers will necessarily continue in the future. Its business model relies on farmers cultivating processed-grade potatoes based on its needs, guidance and supplying the produce to it at agreed prices. Since it does not execute legally enforceable contracts with farmers, there is a risk that such arrangements may not always be honoured. For instance, if prevailing market prices at the time of harvest exceed the pre-agreed price, farmers may choose to sell their produce to third parties instead of supplying to it. In the absence of written contracts, there may also be uncertainty around the obligations of farmers in respect of crop management practices, pesticide usage, irrigation methods, delivery timelines, or adherence to quality standards specified by it. Any failure on the part of farmers to comply with these requirements could affect the quality and quantity of produce procured. This in turn may impair its ability to meet the supply terms agreed with potato manufacturers and snack producers and other buyers, which could adversely impact its revenues and business reputation. 

Dependence on seasonal and climatic conditions for processed-grade potato cultivation: Its business depends substantially on the cultivation of processed-grade potatoes, which is inherently dependent on seasonal and climatic factors. Processed-grade potato crops require specific agro-climatic conditions including suitable temperature ranges, timely irrigation, and defined harvesting cycles. Any adverse deviation from these requirements, such as droughts, unseasonal rains, floods, prolonged dry spells, extreme heat waves, hailstorms, or cold waves, may adversely impact both the quantity and quality of processed-grade potato production. Unfavourable climatic conditions can also lead to an increased incidence of pests and diseases such as late blight, early blight, and bacterial wilt, which are known to reduce yield and impair the processing quality of processed-grade potatoes. Pest outbreaks and disease infestation not only reduce availability but can also increase input costs, as additional crop protection measures may become necessary. 

Dependence on a limited product portfolio: Its business operations are currently concentrated on the cultivation, procurement, and processing of a limited number of potato varieties, including Santana, Frysona, Innovators, Lady Rosetta, and Chipsona. These varieties are primarily chosen due to their suitability for processing into French fries, potato chips, and other frozen products. A substantial portion of its revenue from operations is derived from these varieties, and as a result, the performance of its business is closely linked to the demand trends and processing requirements of these specific types of potatoes. Any reduction in demand for these varieties from processing companies, due to evolving consumer preferences, technological changes in processing equipment, or substitution by competing crop varieties, may materially impact its sales volumes. Further, processing companies may, over time, prefer varieties that offer higher efficiency, better frying quality, or lower wastage, which could require it to alter its current procurement and farming practices. Shifts in industry preferences may necessitate additional investment in seed procurement, farmer training, and field-level trials to ensure adoption of alternate or improved varieties. Such investments may increase costs and impact margins in the short to medium term.

Outlook

Farm Peace is primarily engaged in contract farming, trading of agricultural produce, primarily potatoes, seed trading, distribution of agri-inputs and related storage, maintenance and ancillary services. Its end-to-end support model is built on the principle of leaving no aspect of the farming process unattended. It recognizes that farming is not just an occupation; it is a way of life for millions, and each step requires careful planning, execution, and follow-through to ensure success. That is why its commitment starts long before a single seed is planted and continues well beyond the final product is delivered to market. By providing comprehensive, tailored support, it aims to transform farming into a stable and sustainable livelihood. On the concern side, its operations are dependent on procuring inputs from third party suppliers. These mainly include seed for processed-grade potatoes. It does not own or control these supply sources, and its business depends on maintaining consistent relationships with such external vendors. While it procures seed potatoes from multiple vendors located in Uttar Pradesh, Punjab, Haryana, and Himachal Pradesh, it has entered into a formal written Memorandum of Understanding with only one supplier, M/s Utkal Tubers India. Its remaining procurement arrangements are based on long-standing commercial practice and mutual understanding, without binding long-term commitments. The absence of written contracts with the majority of its suppliers exposes it to risks such as changes in commercial terms, delays in delivery, or reductions in supply volumes. Since processed-grade potato cultivation is highly time-sensitive, any delay in seed availability could disrupt planting cycles, reduce yields, and affect the quality of produce supplied to processing customers.

The company is coming out with an IPO of 54,24,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 59 per equity share to mobilize Rs 32.00 crore. On performance front, its revenue from operations increased by 14.62% to Rs 9,082.77 lakh for FY 2026 from Rs 7,924.22 lakh for FY 2025. Profit after tax has increased by 13.02% from Rs 666.15 lakh for FY 2025 to Rs 752.87 lakh for FY 2026.

Meanwhile, its strategy of Innovation and Market Expansion is central to its vision of transforming agriculture and creating sustainable growth for both farmers and its business. By continuously exploring new technologies, techniques, and markets, it aims to stay ahead of the curve and unlock opportunities that benefit the entire agricultural ecosystem. This strategy not only strengthens its operations but also empowers farmers to achieve higher productivity and profitability. Innovation begins with its extensive research and development efforts, where it explores cutting-edge technologies and methods to improve farming practices. Going forward, it plans to strengthen its farming model through intra-potato diversification, which involves cultivating multiple processing-grade potato varieties rather than relying on a single crop type. This approach is designed to reduce agronomic and market-related risks while ensuring a steady and specification-compliant supply of raw material for industrial applications such as French fries, potato chips, and frozen potato products.