Papadmalji Agro Foods IPO DRHP: ₹13.70 crore fresh issue; revenue up 27% in two years
- Papadmalji Agro Foods files DRHP for SME IPO with ₹13.70 crore fresh issue.
- Proceeds allocated for new manufacturing facility at Bachhasar and debt repayment.
- Revenue grew 27% to ₹33.53 crore in FY2026; PAT rose to ₹5.21 crore.
- IPO opens on 29-Sep-2026 and lists on 07-Oct-2026.
*this image is generated using AI for illustrative purposes only.
Papadmalji Agro Foods Limited, a Bikaner-based manufacturer of traditional Indian papads and allied food items, has filed its Draft Red Herring Prospectus (DRHP) for an SME IPO. The company, which operates under brands such as Zhakaas, Vishal, Rozana, Diamond, and Papadmalji, plans to raise ₹13.70 crore through a fresh issue component, with proceeds earmarked for constructing a new manufacturing facility and repaying secured borrowings.
About the Company
Headquartered in Bikaner, Rajasthan, Papadmalji Agro Foods is an ISO 22000:2018 certified player in the predominantly unorganised papad industry. Founded in 2012 as Vishal Namkeen Bhandar and incorporated in 2017, the company produces handmade and machine-made papads, rice papads (Khichiya), Vrat special papads, Moongodi, and cereal pellets. It maintains a distribution network comprising 76 distributors, 30 wholesalers, and over 8,700 retail outlets across 21 states and three Union Territories. The company also exports to Middle Eastern markets including the UAE, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain.
Financial Performance
The company has demonstrated consistent top-line growth and improved profitability over the last two financial years. Revenue from operations increased from ₹26.27 crore in FY2024 to ₹33.53 crore in FY2026, while Profit After Tax (PAT) surged from ₹2.11 crore to ₹5.21 crore during the same period. Operating EBITDA margin stood at 25.16% in FY2026.
| Metric | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
| Revenue from Operations (₹ Cr) | 26.27 | 31.75 | 33.53 |
| Profit Before Tax (₹ Cr) | 2.13 | 4.72 | 7.24 |
| Profit After Tax (₹ Cr) | 2.11 | 4.72 | 5.21 |
| Total Assets (₹ Cr) | 20.07 | 25.05 | 33.50 |
| Total Equity (₹ Cr) | 6.20 | 10.93 | 16.14 |
Operating cash flow turned positive in FY2025 at ₹2.42 crore after recording a negative outflow of ₹2.75 crore in FY2024, moderating to ₹0.56 crore in FY2026. The debt-to-equity ratio improved significantly from 2.24x in FY2024 to 1.08x in FY2026, reflecting equity accretion from retained profits.
Why the Company Is Raising Funds
The fresh issue proceeds of ₹13.70 crore are allocated to specific corporate objectives:
- Capital Expenditure: ₹7.90 crore will fund the construction of a new manufacturing facility at Bachhasar, Bikaner, including civil works, machinery, and a rooftop solar power system.
- Debt Repayment: ₹5.80 crore is designated for the repayment or prepayment of secured borrowings from banks.
- General Corporate Purposes: A portion of the proceeds will be used for strategic initiatives, marketing, brand building, and contingencies.
Additionally, the issue includes an Offer for Sale (OFS) by India Customer Insight Fund, a SEBI-registered Alternative Investment Fund that has backed the company since 2018. The company will not receive proceeds from this portion.
Business Strengths
Papadmalji Agro Foods distinguishes itself through its organised structure in a fragmented market, supported by ISO 22000:2018 certification and FSSAI licensing. Key strengths include:
- Multi-Channel Distribution: Presence across General Trade, Modern Trade, Quick Commerce, Direct-to-Consumer platforms, and export channels.
- Product Diversity: A portfolio catering to daily consumption, premium segments, and religious observances (Vrat).
- Social Impact: Adoption of the Batara-Batari model, which engages women workers in home-based production while preserving traditional methods.
- Quality Standards: Use of RO-filtered water, zero additives, and third-party accredited laboratory testing.
Key Risks
The DRHP highlights several material risks associated with the business:
- Customer Concentration: Top 10 customers contributed 40.53% of total revenue in FY2026, indicating dependence on a limited client base.
- Supplier Dependence: Top 10 suppliers accounted for 61.75% of total purchases in FY2026, with no long-term supply agreements in place.
- Geographic Concentration: All manufacturing units are located in Bikaner, Rajasthan, and 71.98% of FY2026 revenue was derived from just three states: Rajasthan, Haryana, and Assam.
- Intellectual Property: Key brand logos, particularly under the 'Vishal' brand, are pending registration or opposed by third parties, exposing the company to litigation risks.
- Contingent Liability: A pending income tax demand of ₹276.84 lakh for Assessment Year 2019–20 remains unresolved.
Important IPO Dates
- IPO Opening Date: 29-Sep-2026
- IPO Closing Date: 01-Oct-2026
- Allotment Date: 05-Oct-2026
- Listing Date: 07-Oct-2026
Bottom Line
Papadmalji Agro Foods presents a case of a structured, ISO-certified player scaling operations in the unorganised papad sector. With revenue growing at a CAGR of approximately 13% and PAT more than doubling since FY2024, the company shows strong operational leverage. The IPO proceeds are strategically directed toward capacity expansion and deleveraging, though investors must weigh these positives against significant geographic and customer concentration risks.
How will the new manufacturing facility's capacity expansion impact Papadmalji's ability to diversify revenue away from its top three states?
What strategies is the company implementing to mitigate the litigation risks associated with pending trademark registrations for the 'Vishal' brand?
How might the repayment of secured borrowings affect the company's future cost of capital and flexibility for further debt-funded growth?
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