Pajson Agro India IPO Analysis

While most SME listings sell stories, Pajson Agro brings substance: expanding capacity, quality-led processing, and profitability numbers that outshine far bigger players.

Before the Deep Dive: What’s Working — and What Isn’t

Industry Outlook

Government Initiatives

India is among the largest cashew-producing and exporting countries in the world. The cashew industry employs more than 10 lakh people on farms and factories in rural areas. It exports more than 15% of the world's export share. India primarily exports Cashew Kernels and very small quantities of Cashewnut shell liquid. In FY24, the cashew exports by value stood at $ 339.21 million as against $ 356.32 million in FY23, registering a decline of 4.80%. India exports cashews to over 60 countries spread across different parts of the world. The key export destinations for India are the UAE, Japan, the Netherlands, Saudi Arabia, the USA, the UK, Canada, France, Israel, and Italy. As of FY25 (April to December) the total value of cashew exports stood at Rs. 2,436 crore ($ 289.01 million). Importing of raw cashew nuts has played a key role in the growth of the Indian cashew industry, which accounts for almost half of the domestic and export demand for cashew kernels in the country.

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Import & Processing Support

• Approved ₹60 crore scheme for the mechanisation & automation of cashew units.

• Allowed duty-free import of raw cashew nuts from LDCs under DFTP.

• Provided MAI funding to CEPCI for buyer–seller meets and international fair participation to boost exports.

Domestic Production Support

• Under MIDH & RKVY, expanded cashew cultivation and replaced old plantations with high-yield varieties.

• DAC&FW approved the 1.20 lakh hectare expansion plan proposed by DCCD.

Company’s Origin Story 

The Company was incorporated on September 17, 2021, under the Companies Act, 2013, as Pajson Agro India Private Limited with Aayush Jain and Anjali Jain as the initial subscribers of the Company. 

The company’s name was changed to Pajson Agro India Limited pursuant to conversion froma  Private Limited to a Public Limited Company and vide issuance of a Fresh Certificate of Incorporation dated February 08, 2025.  

Business Model: Where the Money Really Comes From

• Business: Processing of raw cashew nuts into cashew kernels.

• Delivers to: Domestic and international markets, which include Wholesale Mandis, Institutional Sales, Exports, and the B2C brand, Royal Mewa. Active in 18 states and 3 union territories. Institutional clients include Bikanervala, More Retail, Nutraj, Farmley, Reliance Retail, and Haldiram, among others. Work with mandi traders who possess established networks and handle both whole and broken cashew grades.

• By Products: Cashew husk and shells, the by-products of processing, are supplied for agricultural and industrial use, generating additional value from our operations.

• Raw Material: The Principal raw material is raw cashew nut, which is procured domestically and imported.

• Distribution Channel: e-commerce platforms and offline distribution channels.

• Processing unit capacity: 18,000 metric tonnes

• Tech use: To meet market demand and optimise capacity, AI-enabled sorting and grading systems that improve efficiency, accuracy, and product quality are used.

Growth Vision: Growth strategy is to scale our processing capabilities, broaden our product portfolio, and deepen our domestic and global reach, supported by long-term partnerships across our value chain. 

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• Whole Cashew Grades (“W” Grades): “W” stands for White Wholes, indicating whole cashew kernels with a light, uniform colour. 

• Broken Cashew Grades (Pieces): These grades are derived as a by-product during the processing of whole cashew nuts. 

• Scorched Whole Grades ("SW" Grades): “SW” stands for Scorched Wholes, which are whole kernels with slight discolouration from roasting. This grade is also known as “A Grade”

• Rejected and Other Grades: These grades include kernels that do not meet quality standards for premium grades but are still used in food processing industries. 

By-products from RCN Processing (Cashew Shells, Husk): 

• Cashew Shells: Cashew shells serve as a high-calorific biomass fuel and a key source of CNSL, used in brake linings, paints, resins, and coatings—creating strong value through energy and industrial applications.

• Cashew Husk: Cashew husk is used as organic compost, mulch, animal bedding, and low-grade biofuel, providing sustainable and commercially useful disposal options.

Strategic Expansions

• Retail Distribution under “Royal Mewa” Brand: Launched in 2024, Royal Mewa is our premium B2C brand offering a curated selection of dry fruits, including cashews, almonds, pistachios, and raisins. Designed for aspirational and gifting-oriented consumers, particularly during festive occasions such as Diwali, the brand focuses on quality, design, and premium packaging. Royal Mewa products are distributed through leading e-commerce and quick commerce platforms such as Amazon, JioMart, Meesho, and Snapdeal, along with traditional offline retail channels. 

• Capacity Expansion: Pajson Agro’s strategic capacity expansion from 8,000 MT to 18,000 MT within two years—positions the company to scale production, improve efficiency, and support growth across B2B, B2C, and export markets. While utilisation has temporarily moderated as new capacity comes online, the expanded facility provides ample headroom to capture rising demand, enter new geographies, and improve cost competitiveness. Over the medium term, this larger processing base is expected to enhance margins, support stronger brand presence, and accelerate the company’s transition toward a more diversified and export-oriented business.

Risk

• Supplier Concentration Risk: Any disruption in the operations or relationship with Pajson Global DMCC could significantly impact our production and financial performance.

• Related Party Transaction Risk: A high percentage of related party purchases may raise concerns regarding pricing transparency, governance, and operational independence.

• Regulatory and Perception Risk: Despite the gradual transition and operational rationale, reliance on a group entity could be perceived negatively by investors or regulators.

• Foreign Jurisdiction Exposure: As the supplier operates from Dubai, we are subject to cross-border trade regulations, foreign exchange risks, and international legal frameworks.

• Commodity Price Risk: Commodity prices are fluctuating and volatile which have a significant impact on volume and margins of the company.

Revenue Mix In Lakhs

According to Products

According to the Distribution Network

Capacity Utilisation

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Pajson Agro’s management team is promoter-driven, with strong operational involvement across procurement, processing, and sales, supported by a structured senior team overseeing finance, compliance, and plant operations. The promoters retain significant ownership, aligning their interests with the company’s long-term growth. Despite being a relatively young company, management has demonstrated clear strategic direction through capacity expansion plans, vertical integration, and the adoption of advanced processing technologies. While execution discipline and governance maturity will remain important as the business scales, the current leadership shows focus, ambition, and a coherent approach to building a competitive, integrated cashew processing business.

Financial Performance 

Pajson Agro has transitioned from a low-margin trading-like business (FY23) into a scaled, high-margin processing business (FY25–26). Financials show strong operational leverage, healthy profitability, and efficient use of capital. However, inventory buildup, supplier dependence, and rising debt are risks to watch as the company ramps up expanded capacity. The company has installed new machinery that improved operational efficiency and optimised, leading to a sharp jump in PAT margins from 3.5% in FY25 to 10.9% in FY26.

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Pajson Agro compares favourably against its listed peers, with revenue scale bradly similar to Krishival Foods and Aelea Commodities, but significantly superior profitability metrics. The company’s EPS (₹11.67) and RoNW (46.18%) are the highest in the peer set. In contrast, Krishival Foods and Prospect Consumer operate at far lower RoNW levels (9.56% and 8.95%), while Aelea Commodities trades at an inflated valuation due to minimal earnings. Given Pajson Agro’s higher margins, better capital efficiency, and consistent revenue growth, the company is positioned to command a valuation premium relative to comparable players in the dry-fruit and commodity processing segment.

IPO Objectives 

• Capital Expenditure towards Establishment of a Second Cashew Processing Facility at Vizianagaram, Andhra Pradesh. 

• General Corporate Purposes. 

• Company expects to receive the benefits of listing of Equity Shares on the BSE SME including enhancing our visibility and our brand image among our existing and potential customers and creating a public market for our Equity Shares in India. 

Final Words 

Through LMVT Framework:

• Leadership: With Aayush Jain’s 16+ years in operations and multi-channel expansion, Pulkit Jain’s 12+ years in global cashew sourcing, and Anjali Jain’s 7+ years in brand and retail execution, Pajson Agro’s leadership is experienced and execution-driven. The team has the operational depth and industry understanding to scale the business to the next level.

• Moat: While the company has no major structural moat, its focus on cashew processing sets it apart from peers. This specialisation can give it an edge through stronger supplier ties and better sourcing and processing efficiency.

• Valuation: With the industry trading at a median P/E of 78.39× and the company valued at only 9.9× post-IPO, the stock is positioned at an ~87% discount to peers, signalling meaningful upside potential if execution sustains.

• Tailwinds: More Indians are buying dry fruits, premium packaged nuts, and healthier snacks. Exports are growing, and better sourcing options are opening up all of which support demand for large, certified processors like Pajson Agro.

• Bottom line: Pajson Agro is a fast-growing cashew processor with very strong profits, but it still faces risks like dependence on a few suppliers, high inventory needs, and a young B2C brand. It’s a good business, but requires disciplined execution rather than blind confidence.

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