Crazy Snacks files DRHP for IPO to fund expansion
Crazy Snacks Limited filed its DRHP for an IPO to raise ₹9.92 crore for capex and ₹5.71 crore for debt. Revenue grew 30.95% to ₹127.59 crore in FY2024, while PAT increased 58.57% to ₹5.32 crore. The company faces high geographic concentration in UP and Bihar, which account for over 97% of revenue.
*this image is generated using AI for illustrative purposes only.
Crazy Snacks Limited has filed its Draft Red Herring Prospectus (DRHP) with market regulators to launch an Initial Public Offering (IPO), aiming to fund capital expenditure and reduce debt. The Gorakhpur-based food manufacturer, incorporated in 1995, reported a revenue from operations of ₹127.59 crore in FY2024, reflecting a Compound Annual Growth Rate (CAGR) of approximately 30.95% from ₹74.41 crore in FY2022. The company intends to use the net proceeds from the fresh issue to purchase machinery and infrastructure enhancement worth ₹9.92 crore and to repay or pre-pay outstanding borrowings of ₹5.71 crore, with the balance allocated to general corporate purposes.
Financial Performance
The company has demonstrated consistent growth in profitability over the past three fiscal years. Profit After Tax (PAT) increased from ₹2.11 crore in FY2022 to ₹5.32 crore in FY2024, representing a CAGR of approximately 58.57%. For the quarter ended June 30, 2024 (Q1 FY2025), the company recorded a revenue from operations of ₹25.99 crore and a PAT of ₹1.28 crore. The PAT margin has improved sequentially, rising from 2.84% in FY2022 to 4.17% in FY2024 and further to 4.92% in Q1 FY2025.
| Period | Revenue from Operations (₹ Cr) | PAT (₹ Cr) | PAT Margin (%) |
|---|---|---|---|
| FY2022 | 74.41 | 2.11 | 2.84% |
| FY2023 | 89.13 | 3.54 | 3.97% |
| FY2024 | 127.59 | 5.32 | 4.17% |
| Q1 FY2025 | 25.99 | 1.28 | 4.92% |
Business Operations
Crazy Snacks Limited operates through two entities, Crazy Snacks Limited and Crazy Bakery Udyog Private Limited, offering over 297 products under the brands Crazy, Bity, and Baked Gold. The product portfolio includes bakery items such as breads, buns, rusks, cakes, and cookies, as well as snack items like chips and namkeen. The products are priced between ₹2 and ₹170 per unit. The company manages its distribution through a network of 1,795 distributors, primarily concentrated in Uttar Pradesh and Bihar.
Manufacturing and Capacity
The company's manufacturing facilities are located in Gorakhpur, Uttar Pradesh, and are ISO 22000:2018 certified. The combined installed capacity of these facilities stands at 25,860 units, with a capacity utilization of 77.58% in FY2024. The proposed capital expenditure of ₹9.92 crore is intended for the procurement of semi-automatic and automatic machinery, including kneader machines, ovens, and dough mixers, as well as civil work for additional manufacturing space. However, the DRHP notes that orders for this equipment have not yet been placed, introducing execution risk regarding the primary use of IPO proceeds.
Risk Factors
The company faces significant geographic and product concentration risks. Uttar Pradesh and Bihar accounted for 97.47% of revenue in FY2024 and 97.79% in Q1 FY2025. Additionally, rusk, breads, and buns contributed 68.94% of revenue for the period ended June 30, 2024. The company also noted that its manufacturing facilities and registered office are situated on leased land, including 99-year leases from the Gorakhpur Industrial Development Authority. Raw material costs as a percentage of revenue have fluctuated, standing at 56.14% in Q1 FY2025 compared to 73.94% in FY2022, with no long-term supply arrangements or commodity price hedging mechanisms currently in place.
How does the company plan to mitigate the high geographic concentration risk by expanding beyond Uttar Pradesh and Bihar?
What specific strategies will be employed to diversify the product portfolio given the heavy reliance on rusk, breads, and buns?
How will the lack of long-term supply agreements or commodity hedging impact profitability amidst fluctuating raw material costs?
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