Stanbik Agro Limited IPO Analysis

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

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India is one of the major players in the agriculture sector worldwide, and it is the primary source of livelihood for ~55% of India’s population. The Indian agricultural sector is projected to reach US$24 billion by 2025. The Indian food and grocery market is the world’s sixth largest, with retail contributing 70% of the sales. The first advance estimate for FY25 indicated a food grain production of around 165 million metric tons. In FY24, India produced over 332 million metric tons of food grains. The first advance estimate for FY25 indicated a food grain production of around 165 million metric tons. In FY24, India produced over 332 million metric tons of food grains.  

Government Initiatives

• 100% Foreign Direct Investment (FDI) permitted for the food processing sector

• Agriculture Export Policy (AEP): The Government of India released its Agriculture Export Policy in 2018, emphasising agriculture export-oriented production, export promotion, greater farmer realisation, and synchronisation with government policies and programmes.

Company’s Origin Story 

The Company was originally incorporated as a private limited Company in the name of “Stanbik Commercial Private Limited” on February 10th,  2021. The name was changed to “Stanbik Agro Private Limited” vide a fresh Certificate of Incorporation consequent upon Change of Name dated March 21st, 2024 and since then it has commenced its business in manufacturing, wholesaling and supplying of agricultural commodities

Business Model: Where the Money Really Comes From

• Business: manufacturing, wholesaling and supplying of agricultural commodities.

• Business Shift: Historically, operations included trading in pulses and cereals. But now it focuses on fruits and vegetables.

• Business Segments: Contract farming, Modern retailing, B2B business.

• Outlets: 7 outlets - Vasna, Gandhinagar, Shyamal, Narol, Odhav, Maninagar, Chandranagar. 

• Competitive strength: Supply chain network, product quality, diversified customer reach, contract farming expertise, B2B B2C synergy, Market responsiveness, and Inventory management.

• Logistics: The Company primarily depends on third-party logistics service providers for the transportation and distribution of its products.

• Storage: The Company currently owns and operates one godown for inventory storage, measuring ~ 5,600 sq. ft. The Company meets its cold storage and supplementary inventory storage requirements through supplier-managed godowns

• Competition: There are no entry barriers in this industry, which poses a threat of competition from new entrants
  
  

Products Offered: What They Actually Do on the Ground

• Trading- Fruits, Vegetables, Pulses and Cereals 

• Contract Manufacturing- Cutton, Cumin, Sesame

Strategic Expansions

• The company plans to establish 20 new retail outlets under the brand “Stanbik Agro Limited” across the state of Gujarat, all of which are expected to be operational by March 30, 2026. These outlets will have an average size of 900–1,000 square feet and will be operated from leased premises, in line with the company’s strategy of avoiding ownership of real estate and limiting fixed asset intensity. The total estimated investment for this expansion is approximately ₹358 lakh, or about ₹17.9 lakh per store, covering interior works, store infrastructure, equipment, branding, and delivery arrangements.

• Alongside retail expansion, the company intends to strengthen its B2C (modern retail) presence to enhance brand visibility and customer engagement, while reducing reliance on a limited number of wholesale customers. The retail stores are positioned to deliver farm-fresh fruits and vegetables with an emphasis on quality, freshness, and accessibility, supporting stable demand and improved revenue diversification.

• Stanbik Agro also plans to expand its B2B operations by deploying additional working capital from the issue proceeds. Rather than investing in manufacturing or processing infrastructure, the company’s B2B growth strategy is volume-driven, focusing on increasing trading activity, improving inventory availability, and expanding relationships with wholesalers, traders, and B2B e-commerce platforms. This approach allows scalability without materially increasing operational complexity.

Risk

• Internal Risk – Business Related: Dependence on key suppliers, promoters, and logistics efficiency; any disruption in sourcing, people, or transport can impact product quality and revenue.

• Internal Risk – Issue Related

• Share price may fluctuate post-listing and financials based on Indian standards may not be easily comparable for global investors.

• External Risk – Industry Related: Highly exposed to weather conditions, commodity price volatility, and intense competition in the fresh produce and agri-trading sector.

• External Risk – Other Risk: Macroeconomic changes, regulatory shifts, political events, and unforeseen disruptions (pandemics, logistics issues) can affect operations.

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Segment Wise (INR Cr)

Product Wise (INR Crs)

Contact Manufacturing Product (INR Crs)

Management Analysis 

• Promoters are Ashokbhai Dhanajibhai Prajapati and Chirag Ashokbhai Prajapati, where Ashokbhai has 13 (Thirteen) years of experience, and Chiragbhai has an experience of around 2(two) years in the agriculture industry with their innovative business ideas, in-depth knowledge and excellent management skills. We have served our customers proficiently. 

• The company acquired the promoters’ partnership firm, Jay Chamunda Trading Company in March 2024, ensuring continuity of customer relationships, supplier network, and operating know-how rather than building the business from scratch.

Financial Performance 

• The sharp jump in FY25 indicates a significant scale-up in operations, likely driven by higher volumes and/or expansion into new product segments or customers, rather than marginal price increases.

• The slower margin expansion in FY25 (+80 bps vs +250 bps in FY24) indicates margins may be approaching a steady-state level.

Improving PAT margin confirms that operating gains are flowing through to the bottom line, and not being offset by interest or tax pressures.

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IPO Objectives 

• Expansion of Retail Network by launching new Retail Outlets: intend to open 20 Retail stores for our brand ‘Stanbik Agro Limited’ which shall be operational by 30-03-2026

• Brokerage Charges 

• Security Deposits 

• To Meet the Working Capital Requirement: The Company requires additional working capital of Rs. 639.47 lakhs, which will help in the expansion of our business activities, funding future growth requirements of Our Company and other strategic, business and corporate purposes. The additional working capital is based on our management's estimations of the business plan for the FY 2025-26. 

• To Meet the Issue-Related Expenses 

• General Corporate Purpose 

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Through the LMVT Framework:

Leadership: Stanbik Agro is led by a founder-driven leadership team with deep experience in agri-sourcing, processing, and retail execution. Management focuses on disciplined procurement, quality control, and expanding the direct-to-consumer footprint, enabling the company to scale efficiently in a highly fragmented market.
Moat: Combining farm-linked sourcing + contract farming + retail outlets, giving it a differentiated model in this peer group.
Valuation: At the IPO price, Stanbik Agro is valued at ~6x FY25 earnings, a meaningful discount to listed peers. This valuation already prices in the key risks: high customer and supplier concentration, working-capital intensity, and limited differentiation due to the absence of owned processing infrastructure. As a result, downside risk appears contained unless execution weakens materially.
Tailwinds: Rising demand for fresh produce, growth of modern retail, digital traceability initiatives, government support for agri-exports, and increasing consumer interest in sustainably sourced food all support long-term expansion.

Bottom line: Stanbik Agro offers a value-oriented IPO opportunity, backed by real cash flows and a grounded business model rather than aggressive assumptions. It is not a high-moat compounder, but at current pricing, investors are paid to wait for execution.

Best suited for investors seeking reasonable valuation, limited balance-sheet risk, and steady compounding not sharp re-rating stories.

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