Abram Food Ltd. IPO: Key Details

Abram Food

• Abram Food is coming out with an initial public offering (IPO) of 14,28,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 98 per equity share.
• The issue will open on June 24, 2025 and will close on June 26, 2025.
• The shares will be listed on SME Platform of BSE.
• The share is priced at 9.80 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Corporate Makers Capital.
• Compliance Officer for the issue is Sanjiva Gaur.

Profile of the company

Abram Food is engaged in the manufacturing and trading of Chana Dal, Flour (Chakki Atta), Besan, Multi Grain Atta, Maida, Sooji, Spices, Cattle Feed (Khal) and edible oils in its product range and market & sell it in Rajasthan, Delhi /NCR and Uttar Pradesh under the brand name of “Kherliwala” through its distributors. It also provides Chana Dal, Atta, Besan, Chana Churi and Cattle Feed (Khal) to its distributors in bulk quantities of ranging from 30 to 50 kg packaging to sell in loose quantity to end customer through retail outlets. It follows standard packing process to ensure that quality and authentic taste of its products range remains intact.

It handpicks its raw materials from various suppliers who procures such raw material from including but not limited to the Alwar Mandi, Khairthal, Bahrod Jaipur and Delhi. It processes its products with utmost care without using artificial preservatives or chemicals, thereby creating a product portfolio of chana dal, flour, spices, besan and cattle feed which carry the freshness and goodness of each ingredient. Its focus on quality ensures that every step of the process, from procurement, processing to packaging, is carried out to the highest standards. Its manufacturing facilities, coupled with a supply chain, enables it to deliver products that meet the evolving needs of its customers.

The company’s range of flour includes Rajasthan Royal Besan, Rajasthan Royal Maida, Rajasthan, Royal Sooji, Rajasthan Royal Chakki Fresh Atta, Rajasthan Royal Muti Grain Atta and other oil and spices range. Over the years, it has leveraged its experience and understanding of the preferences and tastes of its consumers, and target markets to develop a wide range of products, which has strengthened its foothold in the Rajasthan, Delhi-NCR region specifically in Besan, Chana Dal, Chana Churi, Chana Chilka, Atta, Spice and other categories.

Proceed is being used for:

• Meeting the capital expenditure in requirements for purchase of machineries
• Meeting working capital requirements of the company
• Meeting general corporate purposes

Industry Overview

The agriculture sector in India is expected to generate better momentum in the next few years due to increased investment in agricultural infrastructure such as irrigation facilities, warehousing, and cold storage. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be self-sufficient in pulses in the coming few years due to the concerted effort of scientists to get early maturing varieties of pulses and the increase in minimum support price. In the next 5 years, the central government will aim US$ 9 billion in investments in the fisheries sector under PM Matsya Sampada Yojana. The government is targeting to raise fish production to 220 lakh tonnes by 2024-25.

The Indian agricultural sector is predicted to increase to $24 billion by 2025. Indian food and grocery market is the world’s sixth largest, with retail contributing 70% of the sales. As per the First Advance Estimates for 2023-24 (Kharif only), total foodgrain production in the country is estimated at 148.5 million tonnes. Rabi crop area has from 709.09 lakh hectares in 2022-23 to 709.29 lakh hectares in 2022-23. In 2022-23 (as per the second advance estimate), India's horticulture output is expected to have hit a record 351.92 million tonnes (MT), an increase of about 4.74 million tonnes (1.37%) as compared to the year 2021-22. The Agriculture and Allied industry sector witnessed some major developments, investments, and support from the Government in the recent past. Between April 2000-March 2024, FDI in agriculture services stood at $3.08 billion.

Going forward, the adoption of food safety and quality assurance mechanisms such as Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP), and Good Hygienic Practices (GHP) by the food processing industry will offer several benefits. Through the Ministry of Food Processing Industries (MoFPI), the Government of India is taking all necessary steps to boost investments in the food processing industry in India. Government of India has continued the umbrella PMKSY scheme with an allocation of Rs. 4,600 crore ($559.4 million) till March 2026. 

Pros and strengths

Strategically located manufacturing facilities: The company’s manufacturing cum processing facility is located in Alwar Rajasthan. The company’s present manufacturing utilization capacity as at March 31, 2025 Pulses 4366.53 MT, Flour (inclusive of Atta and Besan,) 506.6 MT and Spices 2.00 MT per year. Its processing units have standard equipment and technology. Technological developments are key in maintaining process efficiencies in manufacturing and it has consistently invested in enhancing its manufacturing and packaging machinery. It adopts strict quality control measures for its products. It can produce the desired quality consistently. Post Packaging, each batch of products are tested to ascertain if the batch is fit for dispatch to its customers.

Extensive and well-established sale and distribution network: As of March 31, 2025, its branded products are sold in the region of Rajasthan and Delhi & NCR, through a network of 80 distributors serviced by 5 sales personnel. It has consistently added distributors to its network to further expand the reach of its brand. It consistently supports its distributors with trade promotion schemes and rewards, such as target schemes at regular intervals and secondary sales promotion schemes. It has its salesforce which work alongside its distributors. They regularly visit its distributors and assess market requirements. Timely servicing of the distributors’ requirements, consistent quality of its supply are the other key ingredients to maintaining its distributor relationships.

Optimum utilization of resources: The company has been into business of manufacturing process where the optimum utilization of resources plays a vital role. And through its manufacturing facility it is utilizing its by-product as a source to earn revenue which lead to minimal wastage. Due to its strict quality control and efficient management its by-products hold good value in the market and prove to be a good source of contribution in the revenue earning of the organization. In the manufacturing process of Chana Dal, its by-products such as Chana Chilka, Chana Churi are effectively stored, after cleaning and packaging the same is sold to the market promising good quality in comparison to the other market players.

Risks and concerns

Maximum revenue comes from Chana and Chana Dal: The company derives a significant portion of its revenue from the sale of Chana and Chand Dal. It manufactures, market and sell Chana and Chana dal majorly to various customers across Rajasthan and Delhi - NCR. It also manufactures and sell Chana and Chana dal to FMCG companies. For the year ended Fiscals 2025, 2024 and 2023, its revenue from its Chana and Chana Dal amounted to Rs 5724.6 lakh, Rs 2237.65 lakh and Rs 2577.60 lakh of its revenue from operations, respectively. Consequently, any reduction in demand from the consumers of Chana and Chana dal could have an adverse effect on its business, results of operations and financial condition.

Geographical constrain: The company’s business operations are majorly concentrated in certain geographical regions. The company has garnered 23.20% and 76.72% of its total revenue from Rajasthan and Delhi-NCR, respectively. The manufacturing operations of the Company are carried in the state of Alwar, Rajasthan. Due to the geographical concentration of its manufacturing operations in Rajasthan, its operations are susceptible to local, regional and environmental factors, such as social and civil unrest, regional conflicts, civil disturbances, economic and weather conditions, natural disasters, demographic and population changes, and other unforeseen events and circumstances. Such disruptions could result in the damage or destruction of a significant portion of its manufacturing abilities, significant delays in the transport of its products and raw materials, loss of key managerial personnel, and/or otherwise adversely affect its business, financial condition and results of operations.

Business is subject to seasonal volatility: It is an agri-based Company, its businesses are sensitive to weather conditions, including extremes such as drought and natural disasters. Adverse weather conditions may also cause volatility in the prices of commodities, which may affect growers’ decisions about the types and quantum of crops to plant and may consequently affect the sales of its products. Consequently, the occurrence of any such unfavorable weather patterns may adversely affect its business, results of operations and financial condition.

Outlook

Abram Food Limited is engaged in the manufacturing and trading of Chana Dal, Flour (Chakki Atta), Besan, Multi multi-grain atta, Maida, Sooji, Spices, Cattle Feed (khali), and edible oils. It has extensive and well-established sale and distribution network. On the concern side, the company’s business operations are majorly concentrated in certain geographical regions and any adverse developments affecting its operations in these regions could have a significant impact on its revenue and results of operations. The company’s business is subject to seasonal volatility, which may contribute to fluctuations in its results of operations and financial condition.

The company is coming out with an IPO of 14,28,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 98 per equity share to mobilize Rs 13.99 crore. On performance front, revenue from operations has increased from Rs 3600.87 lakh for year ended March 31, 2024 to Rs 6404.49 lakh in year ended March 31, 2025 with a resultant increase of 77.86 % in year ended March 31, 2025. Moreover, net profit after tax increased from Rs 101.89 lakh in year ended March 31, 2024 to Rs 325.55 lakh in year ended March 31, 2025 with a resultant increase of 219.52% in year ended March 31, 2025, major increase is due to increase in Sale of Goods.

The company intends to continue to expand the reach of its ‘Kherliwala and its Variants brands’ products in supermarkets and e-commerce. It has long-standing relationships with its distributors and are also focusing to build its customer base across online platforms. The modern retail segment is a growing sales channel for branded products. The online platform is an important part of distribution network as retail consumers are becoming more tech-savvy and are opting for the convenience of online purchases for their grocery needs. It is keen to explore and continue to evaluate any opportunities, which may arise from time to time, to expand its businesses through partnerships or the acquisition of another company or brand. Its expansion will be driven by opportunities to grow its revenues and profitability by tapping into new opportunities in its existing markets as well as in new markets.