Vardaan Biotech Limited IPO

01At a glance

What the company does — breeds, produces, processes and packages agricultural seed, mainly paddy, maize and wheat, and markets it under its own name (AP p.4).

Who pays it — farmers directly and a dealer and distributor network across nine states; direct farmers were ₹10,861.09 lakh of FY26 revenue and dealers ₹5,848.28 lakh (AP p.4).

Why it is raising money — ₹4,943.50 lakh for working capital, ₹3,105.43 lakh to expand the processing unit at Ujjain, ₹382.07 lakh for breeding land and ₹222.00 lakh for an office at Vadodara (DRHP p.102).

How fast it has grown — revenue from ₹14,014.33 lakh in FY24 to ₹16,709.37 lakh in FY26, and profit after tax from ₹1,647.88 lakh to ₹1,834.82 lakh (AP p.8).

The one thing to understand — the promoter, Lokendra Singh Rajput, is an accused in a criminal case brought by the Madhya Pradesh Economic Offences Wing over the seed business he ran before this one, pending before the Sessions Court at Ujjain since June 2022 (DRHP p.345).

02The business, in plain words

A seed company does not grow crops to be eaten. It develops varieties, multiplies them into seed, cleans and grades that seed, packs it, and markets it to farmers who plant it. Vardaan Biotech does all of those steps: germplasm collection, breeding, hybrid development, contract seed production with grower farmers, procurement and storage, processing, quality testing, packaging, marketing and farmer advisory (AP p.4).

A farmer needs seed for the coming season → it is bought from a dealer or directly from the company → the company has had that seed grown under contract, then cleaned, graded and packed at Ujjain → the company is paid per kilogram or per packet.

Its portfolio spans cereals — paddy, wheat, maize, bajra — plus vegetables, herbs, pulses, oilseeds and fodder seed (AP p.4). In practice three cereals do essentially all the work, which section 02 sets out.

Processing runs from one unit on leased land at Gram Jaithal, Ujjain, of 1,15,50,000 kg a year of installed capacity on about 6,000 square metres, certified by an independent chartered engineer on 8 July 2026. Two third-party processors in Hyderabad are used on an as-and-when basis when that unit is not enough (AP p.4, DRHP p.103). The company reports no business segments under Ind AS 108 (AP p.5).

Earnings equation: Revenue = kilograms of seed marketed × price per kilogram, against a cost that is mostly the seed procured from grower farmers. Seed is a one-season product: what is not marketed in its season carries into the next at the risk of germination loss, which is why the company carried 165 days of inventory in FY26 (DRHP p.44).

03Where the money comes from

Three crops are almost the whole business, and which three changed in a single year.

Source: DRHP p.28, p.29. Maize, paddy and wheat together were 99.94% of FY26 revenue. Paddy alone was 75.64% in FY25 and 55.02% in FY24 (DRHP p.29). Soybean seed was ₹1,132.35 lakh, 8.08% of revenue, in FY24 and nil in FY26; mustard ₹833.28 lakh, 5.95%, in FY24 and nil in FY26; vegetable seed ₹291.56 lakh in FY25 and nil in FY26 (DRHP p.28).

By channel, direct farmer sales have grown while dealer sales have not. Farmers were ₹7,287.38 lakh in FY24 and ₹10,861.09 lakh in FY26; dealers were ₹6,726.95 lakh and ₹5,848.28 lakh over the same years (AP p.4). Distribution reaches nine states — Madhya Pradesh, Maharashtra, Telangana, Bihar, Jharkhand, Rajasthan, Gujarat, Chhattisgarh and Uttar Pradesh (AP p.5).

On customer concentration the document is explicit: revenue concentration among the top five customers is stated as not applicable (AP p.5). For a company marketing to farmers through dealers that is a reasonable answer, and it means no concentration table can be built.

Procurement is the concentrated side. Telangana was 75.21% of gross purchases in FY26 and 84.74% in FY25; Madhya Pradesh 14.88% and Gujarat 9.91% in FY26. Those three states were 100.00% of gross purchases in each of the three years (DRHP p.29).

04The growth record

Source: AP p.8, p.9.

Revenue compounded at 9.2% a year over the two years, EBITDA at 8.7% and profit after tax at 5.5%. The EBITDA margin is 16 basis points lower than two years ago and the profit margin 78 basis points lower. Earnings per share moved from ₹12.20 to ₹12.53 and net asset value per share from ₹30.60 to ₹56.77 (AP p.8).

Read from the filing: this is a business whose profit has been broadly flat in absolute terms for three years while its equity base has more than doubled, which is why return on net worth fell from 38.00% to 18.43% without profit falling at all. Equity share capital rose from ₹1,417.00 lakh to ₹1,753.37 lakh in FY26 and other equity from ₹2,919.71 lakh to ₹8,201.38 lakh over two years (DRHP p.65).

Debt went the other way: total borrowings fell from ₹3,024.46 lakh to ₹1,886.44 lakh and the debt-to-equity ratio from 0.70× to 0.19× (AP p.9).

05What the growth is made of

Revenue rose ₹2,695.04 lakh between FY24 and FY26, 19.2% over two years. The document does not disclose volumes in kilograms by crop, so the increase cannot be separated into volume and price.

What it does disclose is that the increase is entirely a change of crop. Maize seed went from 1.99% of revenue in FY25 to ₹6,553.27 lakh, 39.22%, in FY26 — about ₹6,250 lakh of new revenue in one year. Paddy fell from 75.64% to 38.73% over the same year, roughly ₹5,000 lakh of revenue lost. Wheat at ₹3,675.11 lakh, 21.99%, is the third leg (DRHP p.28, p.29). Soybean, mustard, vegetable and pulse seed, together about 16% of FY24 revenue, went to nil (DRHP p.28).

Read from the filing: the top line grew 10.6% in FY26, but more than a third of the revenue base was replaced inside that year. This is a judgement, not a disclosure: a seed company can switch crops between seasons because the asset is the same processing line, so the switch itself is not evidence of anything beyond what the document says — that the mix moves with demand and acreage, and that the company does not guarantee it will be stable.

Channel adds the second part. Direct farmer revenue rose ₹3,573.71 lakh over the two years while dealer revenue fell ₹878.67 lakh (AP p.4). The document does not state whether the direct channel carries a different price or a different collection cycle.

06Earnings quality

Two lines are worth stating precisely. The first is cash: over three years the company earned ₹5,243.69 lakh of profit and its operations produced ₹(1,515.30) lakh of cash, a negative total. The document's own explanation is working capital — net working capital rose from ₹6,888.58 lakh to ₹11,484.37 lakh across the three years, with finished goods rising from ₹4,287.90 lakh to ₹7,541.84 lakh and receivables from ₹3,257.52 lakh to ₹4,541.60 lakh (DRHP p.44).

The second is the auditor's remark. It is an adverse remark, not an observation or an emphasis of matter, and it concerns the audit trail in the accounting software — the feature that records who changed what in the books, and when (AP p.12).

Read from the filing: 165 days of inventory in a product that is planted in a season is the number to watch, because seed that misses its season either carries forward at a germination risk or is written down. The DRHP does not disclose a write-down policy for aged seed stock or the quantity of stock older than one season.

07The balance sheet

Total assets were ₹15,594.29 lakh at the end of FY26, of which ₹15,165.64 lakh were current: inventories ₹7,541.84 lakh, trade receivables ₹4,541.60 lakh, other current assets ₹3,050.90 lakh and cash ₹31.30 lakh. Non-current assets were ₹428.65 lakh, which for a manufacturer is very little — this is a processing business on leased premises (DRHP p.65).

Borrowings were ₹1,886.44 lakh, split ₹353.84 lakh non-current and ₹1,532.60 lakh current, against net worth of ₹9,954.75 lakh, a debt-to-equity ratio of 0.19× (DRHP p.65, AP p.9). Lease liabilities were ₹8.05 lakh in total. Trade payables to micro and small enterprises were ₹229.91 lakh (DRHP p.65).

The working-capital funding table shows how the business has been financed. Of ₹11,484.37 lakh of net working capital at the end of FY26, ₹1,505.01 lakh came from bank borrowing, ₹343.70 lakh from unsecured loans and ₹9,635.66 lakh from equity capital and reserves; two years earlier the equity share was ₹4,116.37 lakh of ₹6,888.58 lakh (DRHP p.44).

The issue size in rupees is not stated, so a post-issue balance sheet cannot be drawn. The stated objects include ₹4,943.50 lakh for working capital, against a working capital requirement the company itself puts at ₹11,484.37 lakh at the last balance-sheet date (DRHP p.102, p.44).

08What the money is for

The issue is a fresh issue of up to 3,50,00,000 equity shares of face value ₹2 each. There is no offer for sale (AP p.1).

Source: DRHP p.102. Only ₹4.00 lakh has been deployed against these objects so far, as certified on 15 September 2026.

The processing expansion is the acquisition of 8,800 square metres at Village Ghattiya, Ujjain, to add capacity beyond the 1,15,50,000 kg a year the existing leased unit carries; an agreement for sale has been entered into for that land (DRHP p.103, DRHP p.193). The cost estimate rests on a chartered engineer's certificate dated 20 August 2026 and, the document states plainly, has not been appraised by any bank, financial institution or other independent agency (DRHP p.102, p.103).

Into the business the whole of it. The issue is entirely a fresh issue. To selling shareholders nil. There is no offer for sale (AP p.1).

The company also confirms that all object funding comes from the net proceeds, so it has made no firm arrangement of finance for 75% of the means of finance, as it would have had to if any part were funded otherwise (DRHP p.103).

09Who is selling

Nobody. The offer-for-sale size is stated as not applicable and the whole issue is a fresh issue of up to 3,50,00,000 equity shares (AP p.1).

10Promoters

There are two promoters, married into the same family and both on the board since incorporation.

Lokendra Singh Rajput, born 1 October 1977, is chairperson and whole-time director. He holds a bachelor's degree in agriculture from Jawaharlal Nehru Krishi Vishwa Vidyalaya and an MBA from Devi Ahilya University, Indore, a diploma in export management, and training under the government's Agri-Clinics and Agri-Business Centres programme (AP p.6).

Rashmi Rajput, born 31 March 1976, is managing director. She holds a bachelor's degree in science and bachelor's and master's degrees in library and information science from Jiwaji University, Gwalior, and worked as a librarian at educational institutions before this company (AP p.6).

The board is completed by Nrupesh Panchal as non-executive director and three additional independent directors, Mayank Jain, Mufaddal Mhowwala and Devyani Chhajed. Himanshu Singh is chief financial officer and Shivani Maharshi Joshi company secretary (AP p.12).

Promoter economics. Rashmi Rajput holds 3,75,00,000 shares at a weighted average cost of ₹0.20 each; Lokendra Singh Rajput holds 1,25,00,000 at ₹0.88 each, against a face value of ₹2. Every share either of them acquired in the last one year and the last three years came by gift or under a bonus issue, so the weighted average cost of acquisition over both windows is nil — including the whole 1,25,00,000 shares Lokendra Singh Rajput acquired in the last twelve months (AP p.11). The company split its shares from ₹10 to ₹2 face value with effect from 6 August 2026, and the figures above are adjusted for that split (AP p.11).

The criminal case. The DRHP's first-listed risk factor is that Lokendra Singh Rajput is an accused in a criminal proceeding and under investigation by law-enforcement agencies including the Economic Offences Wing (DRHP p.24). The matter is SC EOW 01/2022, Economic Offences Wing v. Lokendra Singh Rajput and others, instituted on 22 June 2022 before the District and Additional Sessions Judge at Ujjain. It arises from FIR No.

05/2011 dated 19 April 2011 and concerns alleged irregularities by Vardan Seeds and Agritech, a proprietorship firm of his, in the production, certification, storage and sale of agricultural seeds; a joint inspection by the district administration and the agriculture department on 9 April 2011 is said to have found a discrepancy of over 16,320 quintals of graded soybean seed.

The sections invoked are 409, 420, 467, 468, 471, 474 and 120-B of the Indian Penal Code, sections 13(1)(d) and 13(2) of the Prevention of Corruption Act and section 19 of the Seeds Act read with rule 13 of the Seeds Rules (DRHP p.27, DRHP p.345).

This study states the matter and its stage as the document does. It is pending, and nothing about its outcome is known or assumed here.

Remuneration and related dealings. The abridged prospectus does not carry a related-party summary table, and this study has not read the full related-party note; section 24 says so.

11Who already owns it

Source: AP p.7. Promoters hold 57.03% and the promoter group a further 14.93%, so promoter and group together hold 71.96%.

The largest outside holder is Faithful Vincom Private Limited at 8.92%, with Worthy Distributors Private Limited at 3.27%; the remaining named holders are individuals between 0.51% and 1.71% (AP p.7). The DRHP's abridged summary does not state when any of these holders came in or at what price; the capital structure chapter carries the build-up and was not read for this study.

The post-issue column is blank throughout the document because the issue price is not set. This is a judgement, not a disclosure: on the full 3,50,00,000 shares, post-issue capital would be 12,26,68,580 shares, the two promoters would hold about 40.76%, promoter and group about 51.44%, and the issue would be about 28.53% of the enlarged capital.

12What changed just before the IPO

• The crop mix inverted in one year. Paddy fell from 75.64% of revenue in FY25 to 38.73% in FY26 while maize rose from 1.99% to 39.22% (DRHP p.29).
• Four crop lines went to nil. Soybean, mustard, vegetable and pulse seed, together about 16% of FY24 revenue, produced no revenue in FY26 (DRHP p.28).
• The shares were split from ₹10 face value to ₹2, with effect from 6 August 2026 (AP p.11).
• A promoter received 1,25,00,000 shares in the last year, by gift or bonus, at no cost (AP p.11).
• Equity capital rose in FY26 from ₹1,417.00 lakh to ₹1,753.37 lakh, and other equity from ₹4,682.93 lakh to ₹8,201.38 lakh (DRHP p.65).
• Borrowings were cut by 38% over two years, from ₹3,024.46 lakh to ₹1,886.44 lakh, and unsecured loans funding working capital from ₹1,172.22 lakh to ₹343.70 lakh (AP p.9, DRHP p.44).
• Inventory lengthened from 112 days to 165 across the same three years (DRHP p.44).
• Gujarat reappeared in procurement at 9.91% of gross purchases in FY26 after being nil in FY25 (DRHP p.29).
• Three additional independent directors were appointed, all still described as additional directors at the date of the DRHP (AP p.12).

13Capacity and expansion

Source: AP p.4, DRHP p.103, DRHP p.193.

The DRHP does not disclose capacity utilisation at the Ujjain unit in any year, does not state how much capacity the ₹3,105.43 lakh expansion will add, and does not state a commissioning date. It does state that the existing unit is on leased premises and that the third-party arrangements exist to supplement it (AP p.4).

Capacity is not revenue. Here the chain cannot even be started, because the document gives installed capacity without utilisation, and the expansion without its tonnage.

14Market size and industry structure

As claimed. The industry chapter relies on a report by Dun & Bradstreet, commissioned for this offer document. It states that agriculture accounts for about 26% of global employment on World Bank and International Labour Organization figures, and that global agriculture value added rose from USD 3.1 trillion in 2014 to USD 4.0 trillion in 2023, about 2.8% a year, on FAO figures (AP p.5, AP p.6).

The part that is addressable. Global agricultural value added is not this company's market. It markets paddy, maize and wheat seed across nine Indian states and procures entirely from three. The relevant demand is certified and hybrid seed for those three crops in those states. The abridged summary of the industry chapter does not size that, and the D&B report's India seed-market figures were not read for this study.

What the company is today. Revenue of ₹16,709.37 lakh in FY26, against an Indian seed market the summary does not quantify, so no share can be computed from what has been read.

Every industry figure above comes from a report commissioned by the issuer and is labelled as such.

15Competitive position

The DRHP names four listed peers, set out in section 15, and their revenue puts this company's scale in context: Kaveri Seed at ₹1,39,476.26 lakh and Nath Bio-Genes at ₹44,510.15 lakh are both larger, Bombay Super Hybrid Seeds at ₹34,408.44 lakh is larger, and Indo US Bio-Tech at ₹11,043.91 lakh is smaller (DRHP p.121).

What the document gives as the basis for winning farmer business is a diversified portfolio across crops and seasons, a dealer and distributor network with direct farmer connections across nine states, and an in-house breeding and development programme (AP p.5). None of those is quantified — the document does not state the number of dealers, the number of farmers reached, repeat purchase rates, or how many of its varieties are notified.

The one structural fact the document does give is that the company owns no processing land: the Ujjain unit is on leased premises, and one object of the issue is to acquire land for the expansion (AP p.4, DRHP p.103).

16Peers the company named

Peers named in the offer document: Nath Bio-Genes (India) Limited, Indo US Bio-Tech Limited, Bombay Super Hybrid Seeds Limited and Kaveri Seed Company Limited (DRHP p.121).

Source: DRHP p.121, peer figures from the companies' results for the year ended 31 March 2026 as available on the exchange websites, certified by the statutory auditor on 3 September 2026. The company states the industry price-to-earnings ratio ranges from 7.99× to 33.20× with an arithmetic average of 20.60× (DRHP p.121).

Two observations about the set itself. It spans a factor of thirteen in revenue, from ₹11,043.91 lakh to ₹1,39,476.26 lakh, so size comparability is loose. And the table prints this company's face value as ₹10 while the shares were sub-divided to ₹2 on 6 August 2026, so the earnings per share shown for it is on the pre-split count (DRHP p.121, AP p.11).

Where this issue sits among those multiples cannot be said until a price band exists, which is section 16's subject and does not arise at DRHP stage.

17Risks, in plain words

Promoters. The first risk factor in the document is the criminal proceeding and Economic Offences Wing investigation involving one of the two promoters, over the seed business he ran before this company, set out in section 09 (DRHP p.24, p.345). Separately, seven tax proceedings are outstanding against the promoters for ₹41.6 lakh (AP p.12).

Business. Three crops were 99.94% of FY26 revenue (DRHP p.28). A crop failure, an acreage shift or a pricing move in paddy, maize or wheat has nowhere else to be absorbed, and the four other crop lines the company used to carry produced nothing in FY26.

Suppliers. Three states were 100.00% of gross purchases in each of the last three years, with Telangana alone at 75.21% in FY26 (DRHP p.29). Seed procurement is contracted with grower farmers a season ahead, so a bad season in Telangana affects the following year's saleable stock, not just that year's cost.

Financial. Operating cash flow was negative in two of the last three years and negative ₹1,515.30 lakh in total across them, while working capital days rose from 180 to 237 and inventory from 112 days to 165 (AP p.8, DRHP p.122, p.44).

Legal. The company is a party to 23 criminal proceedings it has brought and 23 brought against it, plus four tax proceedings against it, aggregating ₹95.21 lakh and ₹144.21 lakh respectively (AP p.12).

Regulation. Seed production, certification, storage and sale are regulated under the Seeds Act and Rules — the same statute invoked in the case against the promoter (DRHP p.345).

Accounting. The statutory auditor has recorded an adverse remark that the audit trail feature in the accounting software was not enabled (AP p.12).

Issue-specific. The expansion cost of ₹3,105.43 lakh has not been appraised by any bank, financial institution or independent agency, and rests on a chartered engineer's certificate and quotations (DRHP p.102, p.103).

18Litigation and regulatory matters

Source: AP p.12 and AP p.13, as at the date of the DRHP, to the extent ascertainable and quantifiable, with material civil matters determined under the company's materiality policy.

The single criminal proceeding against the promoters is the Economic Offences Wing matter described in section 09. There are no disciplinary actions by SEBI or the stock exchanges against the promoters in the last five fiscals. The 46 criminal proceedings involving the company, 23 brought by it and 23 against it, are not described in the abridged summary; the outstanding-litigation chapter carries them and was read only for the promoter matter.

19Related-party transactions

Not read for this study. The abridged prospectus carries no related-party summary, and the restated financial information's related-party note was not reached. This is a gap in this version of the study rather than a finding about the company, and it will be filled at the red herring prospectus stage.

What the document does show in passing is that unsecured loans funding working capital fell from ₹1,243.18 lakh in FY25 to ₹343.70 lakh in FY26 (DRHP p.44); the source of those loans is in the note that has not been read.

20What the offer document does not say

• No capacity utilisation, in any year, for the one processing unit the company owns machinery in (AP p.4).
• No capacity addition stated for the ₹3,105.43 lakh expansion, and no commissioning date (DRHP p.102).
• No volumes. Revenue by crop is given in rupees only, so price and quantity cannot be separated.
• No customer concentration, stated as not applicable for the top five (AP p.5).
• No dealer count or farmer count, and no repeat-purchase or retention figure, for a business whose strength is stated as its distribution network.
• No explanation of why four crop lines went to nil between FY24 and FY26 (DRHP p.28).
• No ageing of seed inventory, against 165 days of stock in a seasonal product (DRHP p.44).
• No price band, lot size or issue dates, which is normal at DRHP stage.
• No description of the 46 criminal proceedings involving the company in the abridged summary (AP p.12).

21Five questions for management

1. Maize went from 1.99% of revenue to 39.22% and paddy from 75.64% to 38.73% in a single year. Was that a change in what farmers wanted, in what the company could procure, or in which contracts it took?
2. What was capacity utilisation at the Ujjain processing unit in FY24, FY25 and FY26, and how much of FY26 volume went through the two third-party processors in Hyderabad?
3. Inventory is 165 days in a seasonal product. How much of the closing FY26 stock was produced in an earlier season, and what is the policy for writing down seed that has aged past its germination certification?
4. Procurement has been 100% from three states for three years, three-quarters of it from Telangana. What would the company do in a season when the Telangana crop fails?
5. What are the 23 criminal proceedings the company has instituted, and the 23 against it, and are they of one kind — recovery proceedings under section 138 of the Negotiable Instruments Act, for instance — or several?

2Sources and cited facts

This study was read from 2 documents the company filed. The 70 figures it cites are listed under the document each came from, with the page and the sentence as printed.