Eldorado Agritech Limited IPO

01At a glance

What the company does — research, production, processing and distribution of hybrid and open-pollinated seeds, and manufacture and distribution of bio-stimulants, agrochemicals and specialty fertilisers; at June 2025 it had 226 seed products for 47 crops, 26 bio-stimulants, 101 agrochemicals and 19 specialty fertilisers (DRHP p.24).

Who pays it — dealers who serve farmers; average revenue per dealer was ₹0.57 million in FY25 (DRHP p.121). Seeds were 63.02% of FY25 revenue and crop care the rest (DRHP p.42, DRHP p.121).

Why it is raising money — ₹1,632.00 million to repay the company's borrowings, ₹818.00 million for the material subsidiary to repay its borrowings, and the rest for general purposes (DRHP p.25).

How fast it has grown — revenue from ₹2,698 million in FY23 to ₹3,522 million in FY24 and ₹4,415 million in FY25 (DRHP p.46).

The one thing to understand — fast, profitable growth that ties up cash, with two-thirds of the offer going to the promoters. Net working capital reached 85.96% of FY25 revenue as inventory rose from ₹1,519 million to ₹3,008 million, and ₹6,600 million of the ₹10,000 million offer is shares sold by the promoters (DRHP p.24, DRHP p.43).

02The business, in plain words

A seed company develops or licenses crop varieties, contracts farmers to grow seed, processes and stores it, and sells it through dealers before each sowing season; it also sells crop-protection and nutrition products through the same dealers.

A paddy farmer needs hybrid seed before the monsoon → the farmer buys an Eldorado hybrid from a local dealer → the dealer stocks it from the company's distribution network → the company is paid by the dealer, holding the rest of its seed stock until the next season.

Earnings equation: Profit ≈ seed and crop-care sales × gross margin − R&D, distribution and interest. EBITDA margin was 25.16% in FY25 (DRHP p.121).

03Where the money comes from

Source: DRHP p.121.

04The growth record

Source: DRHP p.26, DRHP p.46, DRHP p.48, DRHP p.121.

05What the growth is made of

Both segments, and more dealers selling more. Revenue grew 27.92% a year over two years, with crop care growing faster than seeds (DRHP p.121, DRHP p.204). Products launched in the last three years were 17.73% of FY25 revenue in seeds and 12.25% in crop care (DRHP p.121).

06Earnings quality

Over FY23 to FY25 operating cash flow was negative ₹934.51 million against profit of ₹1,499.68 million (our arithmetic, DRHP p.26, DRHP p.48). The company attributes the outflows to seed stock held between seasons (DRHP p.48). Working-capital days rose from 202 in FY23 to 248 in FY25 (DRHP p.121). The company treats seed income as agricultural income exempt from income tax under Section 10(1) of the Income Tax Act (DRHP p.42).

07The balance sheet

Source: DRHP p.26, DRHP p.43.

08What the money is for

Source: DRHP p.25.

09Who is selling

Source: DRHP p.25, DRHP p.110.

10Promoters

The promoters are Dr. Srinivasa Rao Linga and Usha Rani Papineni, who with the promoter group hold 99.74% (DRHP p.24, DRHP p.25). Four criminal proceedings and one tax proceeding, involving ₹0.27 million, are pending against the promoters (DRHP p.27).

11Who already owns it

Source: DRHP p.25, DRHP p.26. The fourth row is our arithmetic.

12What changed just before the IPO

• Inventory — doubled in FY25 (DRHP p.43).
• Margins — EBITDA margin up to 25.16% (DRHP p.121).
• R&D — spending up from ₹42.55 million to ₹125.70 million over two years (DRHP p.121).

13Capacity and expansion

Capacity is seed production through growers, processing and dealer reach. The proceeds repay debt; no capacity expansion is funded (DRHP p.25).

14Market size and industry structure

The F&S report cited in the offer document values India's seed market at USD 3.8 billion in 2024, projecting USD 5.56 billion by FY2030, and its agrochemicals market at about USD 8.2 billion in FY2024, projecting USD 11.3 billion by FY2030 (DRHP p.24). Those projections are F&S's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• One of the most diversified agro-sciences companies in India, citing F&S (DRHP p.24).
• Fastest revenue growth among its listed peer set, citing F&S (DRHP p.204).

Against that: seasonal, weather-dependent demand, heavy working capital, dealer competition, tax treatment of seed income, and pending licence updates (DRHP p.42, DRHP p.46, DRHP p.50).

16Peers the company named

Source: DRHP p.125, DRHP p.204. The peers' P/E ranges from 21.13 to 58.75, average 34.80 (DRHP p.120).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Working capital. 86% of revenue tied up (DRHP p.43).
• Cash. Negative operating cash flow in two of three years (DRHP p.48).
• Tax. Seed income treated as exempt agricultural income (DRHP p.42).
• Collections. Bad-debt provisions rising (DRHP p.46).
• Licences. Some approvals pending address updates (DRHP p.50).

18Litigation and regulatory matters

Source: DRHP p.27.

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• What the 18 criminal cases against the company concern, in the pages read.
• How much tax would be due if seed income were not exempt, in the pages read.
• Why inventory doubled in one year, beyond seasonal stocking (DRHP p.48).
• Which states and crops drive sales, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Why did seed inventory double in FY25, and how much is carried from past seasons?
2. What would the tax bill be if seed income lost its exemption?
3. Why are the promoters selling ₹6.6 billion of shares when the company needs working capital?
4. What are the criminal cases against the company and promoters?
5. How much of revenue depends on paddy and a few other crops?

1Sources and cited facts

This study was read from 1 document the company filed. The 24 figures it cites are listed under the document each came from, with the page and the sentence as printed.