Shivchem Agro Limited, an agrochemical company incorporated in 2021, has filed its Draft Red Herring Prospectus for an initial public offering with a fresh issue size of ₹10.40 crore. The company reported revenue from operations of ₹33.82 crore in FY2025-26, reflecting a two-year compound annual growth rate of approximately 75.79%.

About the Company

Shivchem Agro Limited is headquartered in Rohini, New Delhi, and operates a 22,680 sq. ft. manufacturing facility in Jhajjar, Haryana. The company is engaged in the manufacturing, distribution, and sale of agricultural formulations, including insecticides, fungicides, herbicides, plant growth regulators (PGRs), rodenticides, and fertilizers. It holds licenses for 176 agrochemical products under the Insecticides Act, 1968, and 82 fertilizers under the Fertilizer Control Order, 1985.

The company distributes its products across eight states in India through a network of 685 distributors as of March 31, 2026. This network is supported by five godowns and a sales team of 39 members. Shivchem Agro holds ISO 9001:2015, ISO 22000:2018, and ISO 31000:2018 certifications. Its product portfolio includes 88 insecticides, 40 fungicides, 37 herbicides, 8 PGRs, and 3 rodenticides.

Financial Performance

The company has demonstrated significant top-line growth over the last three fiscal years. Revenue from operations increased from ₹10.94 crore in FY2023-24 to ₹27.46 crore in FY2024-25, and further to ₹33.82 crore in FY2025-26. Profit After Tax (PAT) grew from ₹1.29 crore in FY2024 to ₹3.25 crore in FY2026. The EBITDA margin stood at 17.69% in FY2025-26.

Operating cash flows were negative in FY2023-24 (-₹4.34 crore) and FY2024-25 (-₹3.00 crore), turning positive at ₹1.79 crore in FY2025-26. The debt-to-equity ratio improved from 9.94x in FY2024 to 2.49x in FY2026.

Why the Company Is Raising Funds

The proceeds from the ₹10.40 crore fresh issue are allocated as follows:

• Working Capital Requirements: ₹6.90 crore will be used to fund trade receivables, inventories, payments to trade payables, and day-to-day operations across multiple godowns.
• Debt Repayment: ₹3.50 crore will be utilized for the full or partial repayment and pre-payment of business loans, vehicle loans, and working capital facilities to reduce outstanding indebtedness.
• General Corporate Purposes: The balance amount, subject to a cap of 15% of the total raised, will meet operating expenses, development costs, and marketing capabilities.

Business Strengths

The company cites several strengths supporting its business model:

• Diversified Product Portfolio: Licenses for 176 agrochemical products and 82 fertilizers reduce dependency on any single category.
• Expanding Distribution Network: The distributor base expanded from 185 in FY2023-24 to 685 by March 2026, covering eight states.
• Low Customer Concentration: The top 10 customers contribute only 28.71% of revenue, mitigating key customer risk.
• Automation Investments: Capital expenditure on fully automatic filling and packaging machines enhances productivity and consistency.
• On-Field Demonstrations: A dedicated team provides practical demonstrations to farmers, supported by digital content on social media channels.

Key Risks

Material risks disclosed in the DRHP include:

• Raw Material Dependency: Net cost of materials consumed accounted for approximately 63% of total expenses. The top single supplier accounts for up to 44.16% of purchases without long-term supply contracts.
• Single Manufacturing Facility: All production occurs at one leased facility in Jhajjar, Haryana, exposing the company to operational disruptions from equipment breakdowns or regulatory shutdowns.
• Geographic Concentration: Andhra Pradesh contributed ~33.98% of revenue in FY2025-26, indicating dependence on specific regional markets.
• Promoter Related Transactions: Unsecured borrowings of ₹223.10 lakh from promoter Rohit Agarwal and capital advances to Managing Director Sachin Agarwal for an incomplete property transaction pose potential conflicts of interest.
• Regulatory Compliance: History of delayed statutory payments, including Labour Welfare Fund delays up to 851 days, could lead to penalties.

Important IPO Dates

• IPO Opening Date: 28-Sep-2026
• IPO Closing Date: 30-Sep-2026
• Allotment Date: 01-Oct-2026
• Listing Date: 06-Oct-2026

Bottom Line

Shivchem Agro Limited presents a high-growth profile with a 75.79% revenue CAGR and improving profitability metrics. However, the investment thesis is tempered by risks related to raw material concentration, reliance on a single manufacturing unit, and historical negative operating cash flows. The IPO proceeds aim to strengthen the balance sheet through debt reduction and working capital infusion.