Farm Peace Limited, an integrated contract farming company specializing in processed-grade potatoes, has filed its Draft Red Herring Prospectus (DRHP) with SEBI. The Ahmedabad-based firm seeks ₹27.80 crore through a fresh issue to fund working capital and general corporate purposes.

Company Overview

Farm Peace Limited operates as an integrated contract farming company, bridging the gap between potato farmers and large food processing corporations. Incorporated in 2021, the company specializes in cultivating processed-grade potato varieties such as Santana, Frysona, Innovators, Lady Rosetta, and Chipsona. These are supplied to manufacturers of French fries, chips, and other potato-based products.

The company employs a 100% buy-back model, engaging over 800 farmers across Gujarat. It provides comprehensive support including seed supply, soil preparation guidance, and pest management. Farm Peace scaled its operations from 1,400 acres in FY2023 to over 5,660 acres in FY2026, producing approximately 61,680 metric tonnes annually. The company uses a proprietary mobile application for operational management.

Offer Details

The IPO is structured as a fresh issue with no Offer for Sale (OFS). The total net proceeds of ₹27.80 crore will be deployed as follows:

• Funding Incremental Working Capital Requirements: ₹23.00 crore (82.73%)
• General Corporate Purposes: ₹4.80 crore (17.27%)

Key Dates:

• IPO Opening Date: 01-Sep-2026
• IPO Closing Date: 03-Sep-2026
• Allotment Date: 04-Sep-2026
• Listing Date: 08-Sep-2026

Price band and lot size details are not yet available in the DRHP data.

Financial Highlights

Farm Peace has demonstrated consistent revenue growth over the last three fiscal years. However, PAT margins have compressed slightly from 9.85% in FY2024 to 8.29% in FY2026. A notable concern is the persistent negative operating cash flow across all three years.

Total assets grew significantly from ₹31.76 crore in FY2024 to ₹99.84 crore in FY2026, driven by an expansion in current assets reflecting the working capital-intensive nature of the business.

Risk Factors

Investors should note the following material risks highlighted in the DRHP:

• Absence of Formal Contracts: The company operates through verbal arrangements with farmers, which may lead to supply shortfalls if market prices exceed pre-agreed prices.
• Negative Operating Cash Flows: The company reported negative cash flows from operations in FY2024 (₹-1.54 Cr), FY2025 (₹-17.57 Cr), and FY2026 (₹-7.17 Cr).
• Geographic Concentration: Operations are 100% concentrated in Gujarat, exposing the business to region-specific climatic and regulatory risks.
• Customer Concentration: Top 10 customers represent 80.68% of potato sales in Fiscal 2026.
• Working Capital Intensity: Significant upfront investments are required for seed procurement and farmer payments.

Valuation & Peer Comparison

Peer comparison data and specific valuation multiples (P/E, P/B) are not available in the provided DRHP data as the price band has not been disclosed. The post-issue equity is estimated at approximately ₹71.28 crore (pre-issue equity of ₹43.48 crore plus fresh proceeds of ₹27.80 crore). Investors should refer to the final RHP for detailed peer benchmarking.

Bottom Line

Farm Peace presents a niche play in India’s agri-supply chain with strong revenue growth and a scalable contract farming model. However, the absence of formal farmer contracts, high customer concentration, and persistent negative operating cash flows pose significant execution and liquidity risks that investors must weigh carefully.