Sresta Natural Bioproducts Ltd IPO

Last Updated on October 17, 2023 by BFSLTeam BFSLTeam

Sresta Natural Bioproducts Ltd. is the parent company of the popular 24 Mantras brand. It is a top player in the organic food sector in India and globally. This company offers a diverse product mix which you can broadly classify into three categories, namely packaged food, cooking essentials and beverages.

Sresta Natural Bioproducts Limited is planning to go public by launching an IPO. This company filed its Draft Red Herring Prospectus to SEBI to raise Rs. 500 million from a fresh issuance of equity shares. The company is awaiting the market regulator’s approval.

To know more about the upcoming Sresta Natural Bioproducts Limited IPO, read till the end.  

About the Company

Sresta Natural Bioproducts started its operation in 1992 by Raj Saleem. During this period, the founder used to work in agricultural industries. Here, he noticed the growing use of fertilisers and pesticides to cultivate raw materials. Knowing how this is harmful for consumption, the journey of Sresta Natural Bioproducts began.

This company grows, markets and sells its products under the brand name of 24 Mantras. Sresta Natural Bioproducts focuses on organic farming relying upon natural resources for cultivation purposes. It aims to promote a healthy lifestyle for consumers along with a sustainable life for farmers. Thus, this brand operates a sustainable business by addressing the needs of both farmers and consumers. 

According to its DRHP, 24 Mantras is the largest brand today in the packaged organic food category. The company also dominates the organic food market, holding 29% of the market share as of FY 2020. 24 Mantras is also a significant Indian organic food brand in the USA in Indian and Mainstream stores. Till September 2021, this company held a global presence in 34 countries. 

This company has the largest land holdings among B2C food companies present in India. It also has an extensive relationship with farmers across 12 Indian states. Till September 2021, this company’s network involved 34,516 farmers on a national level. Sresta Natural Bioproducts Limited also involves 65 vendors or companies and other aggregators.

In terms of finances, the total income of this company has witnessed high growth, going up from Rs. 2,082.08 million in FY 2019 to Rs. 3,143.70 million in FY 2021. This company’s profit after tax also grew to Rs. 103.93 million in FY 2021 from a loss of Rs. 34.69 million in FY 2019.

IPO Details and Objectives

Sresta Natural Bioproducts Limited submitted its draft papers to SEBI on January 10, 2022, with the proposal to go public. With its upcoming IPO, the organic food seller plans to raise Rs. 500 million from a fresh issue of equity shares. This company will also offer 70,30,962 equity shares as an Offer for Sale from its shareholders. 

The shareholders participating in this IPO are- Venturest Trustee Company Private Limited, Peepul Capital Fund III LLC and Venturest Life Fund III LLC. The Sresta Natural Bioproducts Limited IPO is a book-built issue. This means you must place a bid more or at par with the floor price to invest in this IPO. 

This company has yet to declare the total quantity of equity shares offered as a fresh issue. It will also declare the worth of shares for its OFS, the price band, bid opening and closing dates and the lot size of its IPO. The face value for the upcoming IPO shares is Rs. 10 per equity share. 

Sresta Natural Bioproducts Pvt Ltd plans to use the net proceeds for its upcoming IPO to fund its working capital needs. This company also plans to use these funds for partial or full repayments of secured and unsecured debts and regular corporate purposes. 

Also Read: How Can You Analyse An IPO?

Strengths of Sresta Natural Bioproducts ltd

The points below highlight a few strengths that may make Sresta Natural Bioproducts Ltd IPO the right investment for you:

• Sresta Natural Bioproducts Ltd’s revenue from operations has seen significant growth from Rs. 2055.14 million in FY 19 to Rs. 3,120.68 million in FY21. 
• The organic food market has seen a growth of 21% CAGR from FY 2015 to FY 2020. This is one of the reasons for this firm to become a market leader in the organic food sector with an diverse product portfolio. 
• 24 Mantras is a leading organic food brand in the USA and has a global footprint exporting products to more than 34 countries. 
• This brand hosts a pan-India presence with market leadership and an omnichannel distribution network available via both online and offline mediums.
• The need for an extensive procurement network with efficient and large-scale sourcing acts as an entry barrier. This is further strengthened through exclusive access of lands to farmers within its network.

Risks Associated with Sresta Natural Bioproducts ltd

Besides the above strengths, you must also make a note of the following risks associated with the business of Sresta Natural Bioproducts Ltd. 

• The efficient business flow of this company relies on the successful procuring of agricultural products from farmers, certified vendors and aggregators. Failure to acquire them can adversely affect the company’s business, financial conditions and operations. 
• Failure of the company to meet the taste requirements or other preferences of its consumers or an inability to adapt to changing consumer buying behaviour can diminish its brand image. This can cause a decline in demand for these products and eventually result in falling sales. 

Summary

Investments in equity and related instruments carry a certain degree of risk. This risk can be subjective as the risk appetites of investors vary. Therefore, experts suggest potential investors read the DRHP thoroughly. This will help you determine whether investing in Sresta Natural Bioproducts Limited IPO is good for your financial standings or not. 

If you are looking forward to growing your capital by investing in a top player in the organic food industry, this upcoming IPO may be the right choice. Explore our website to learn how to invest in the upcoming Sresta Natural Bioproducts Limited IPO. You can also open a Demat and trading account with us and commence your investment journey. 

Also Read: IPO investment strategy

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