Papadmalji Agro Foods Limited IPO

01At a glance

What the company does: makes handmade papads through home-based women workers, machine-made papads, rice papads (khichiya), vrat special papads and moongodi in Bikaner, Rajasthan, makes handmade papads for other brands, and trades cereal pellets (RHP p.159).

Who pays it: distributors and wholesalers (general trade, 57.91% of FY26 revenue) and modern trade chains (40.74%), with small sales through one quick commerce platform, its own website and a merchant exporter (RHP p.169). Customers are not named. The largest was 9.08% of FY26 revenue and the top ten 45.94% (RHP p.222).

Why it is raising money: ₹790.00 lakh for a new rice papad unit at Bachhasar, Bikaner, and ₹580.26 lakh to repay bank borrowings, with the rest for general corporate purposes (RHP p.111).

How fast it has grown: revenue went from ₹2,627.19 lakh in FY24 to ₹3,353.48 lakh in FY26 and profit after tax from ₹210.76 lakh to ₹521.26 lakh (RHP p.74). Our arithmetic: about 13.0% a year for revenue and 57.3% a year for profit (RHP p.74).

The one thing to understand: profit has not turned into cash. Over FY24 to FY26 the company reported ₹1,204.46 lakh of profit after tax and ₹22.63 lakh of net operating cash flow, our arithmetic from the cash flow statement (RHP p.75). Inventory at March 2026 was ₹2,498.61 lakh, about 74.5% of a year's revenue, our arithmetic (RHP p.73).

02The business, in plain words

The company sells papad, a thin sun-dried or machine-dried disc of seasoned lentil or rice dough that households roast or fry (RHP p.164). Handmade papads are rolled at home by women workers (Bataris) who are engaged and supervised by contractors (Bataras); the company supplies the dough and inspects what comes back (RHP p.35). It has agreements with 9 Bataras and cannot say how many Bataris they engage (RHP p.230). Machine-made papads and moongodi are made at the Gharsisar unit and rice and vrat papads at the Karni unit, both rented (RHP p.212, RHP p.213).

A household or restaurant needs papad → purchases it from a local shop or a modern trade store → the company makes it in Bikaner by hand through contractors or by machine → the company is paid by distributors, wholesalers and retail chains, which carry it to the shelf.

The business began in 2012 as Vishal Namkeen Bhandar, a sole proprietorship of Jai Agarwal in Bikaner, which the company took over under a business transfer agreement in February 2018 (RHP p.160). It sells under five brands: Zhakaas (rice papads, ready-to-fry and pellets), Vishal (handmade), Rozana (machine-made), Diamond (handmade) and Papadmalji (its own website) (RHP p.159, RHP p.160). Products reached 21 states and 3 union territories by March 2026 (RHP p.160). It had 118 employees, 39 of them women, and 22 contract labourers at March 2026 (RHP p.229).

Earnings equation: Revenue = kilograms sold × realisation per kilogram, and profit is what remains after pulses, flours, oil, spices and packing material, Batara and contract charges, staff, freight and interest. In FY26 materials consumed were ₹1,539.11 lakh and employee costs ₹322.74 lakh (RHP p.74); contractual charges, mainly Batara charges and contract labour, were ₹273.78 lakh and freight outward ₹81.42 lakh (RHP p.331).

03Where the money comes from

Source: (RHP p.170); the last line is our arithmetic from the same table.

Source: (RHP p.222). The same risk factor gives different FY26 figures in its text, 9.26% for the largest customer and 40.53% for the top ten, than in its own table (RHP p.24, RHP p.25).

Revenue became less concentrated in FY26: the top ten customers fell from 69.25% to 45.94% of revenue (RHP p.222). The customers are not named because they did not give consent (RHP p.223). By channel, general trade fell from 72.56% of revenue in FY24 to 57.91% in FY26 and modern trade rose from 26.09% to 40.74% (RHP p.169). By state, Rajasthan was 50.42% of FY26 revenue, Haryana 12.15% and Assam 9.41% (RHP p.33). Trading of groundnut stopped in October 2024 and of paddy and rice in May 2025 (RHP p.170).

04The growth record

Source: KPI table (RHP p.130), cash flow (RHP p.75), borrowings as long-term plus short-term borrowings, our arithmetic (RHP p.73).

Our arithmetic from the KPI table: revenue grew about 13.0% a year from FY24 to FY26, operating EBITDA about 59.7% and profit after tax about 57.3%; EBITDA margin rose 1,258 basis points and PAT margin 752 basis points (RHP p.130). FY26 revenue growth was 5.62% (RHP p.130).

Two points under the table. The company paid no current tax in FY24 or FY25, because brought-forward losses of ₹184.51 lakh and ₹453.82 lakh were set off; FY26 was the first year with a current tax charge, ₹178.61 lakh (RHP p.309). The retained earnings account stood at a deficit of ₹640.27 lakh at April 2023 and turned positive only in FY25 (RHP p.296). Other income was ₹0.04 lakh in FY26, a negligible share of profit before tax of ₹724.22 lakh (RHP p.74).

05What the growth is made of

Revenue rose ₹726.29 lakh from FY24 to FY26: machine-made papads added ₹430.54 lakh, handmade papads ₹130.24 lakh and rice papads ₹83.91 lakh, our arithmetic from the product table (RHP p.170). The company attributes the FY26 increase in finished-goods sales to higher sales of the Rozana brand (RHP p.332). In FY25 trading of groundnut and other commodities lifted other operating revenue to ₹447.52 lakh, and it fell back to ₹121.44 lakh in FY26 (RHP p.332).

Production is given in kilograms. Machine-made papad output was 5,91,360 kg in FY24 and 6,26,925 kg in FY26; rice papad output 9,00,480 kg and 10,20,031 kg (RHP p.212, RHP p.213).

Read from the filing: machine-made papad revenue per kilogram of output comes to about ₹85 in FY24 and ₹149 in FY26, while rice papad revenue per kilogram stays near ₹79 to ₹81, our arithmetic from the product revenue (RHP p.170) and the output tables (RHP p.212, RHP p.213).

The prospectus does not give volumes sold or prices, and output is not the same as sales, so the increase cannot be split reliably into volume and price. Handmade papad capacity and output are not given, because the work is done through contractors (RHP p.212).

The margin increase came mostly from materials. Materials consumed fell from 57.85% of total income in FY24 to 45.90% in FY26 (RHP p.332, RHP p.336). Packing material consumed was ₹69.82 lakh in FY24, ₹27.94 lakh in FY25 and ₹151.33 lakh in FY26 (RHP p.301). The company attributes the lower cost to procurement efficiencies, material usage and scale (RHP p.336).

06Earnings quality

The item that needs explaining is inventory. It rose ₹683.95 lakh in FY26, which absorbed most of the year's operating profit before working capital changes of ₹848.05 lakh (RHP p.75). At March 2026 the company held ₹1,235.48 lakh of raw material, ₹816.06 lakh of packing material and ₹447.07 lakh of finished goods (RHP p.300). Read from the filing: the packing material stock is about 5.4 times the ₹151.33 lakh of packing material consumed in FY26, our arithmetic (RHP p.300, RHP p.301). The company says raw material procurement is concentrated in certain seasons (RHP p.39). It does not explain the size of the packing material stock.

Bad debts of ₹29.91 lakh were written off in FY26, against ₹0.15 lakh in FY25, for old balances (RHP p.334).

07The balance sheet

At March 2026 borrowings were ₹998.56 lakh: ₹95.87 lakh long-term and ₹902.69 lakh short-term, of which ₹858.49 lakh was bank borrowing payable on demand and ₹22.05 lakh loans from directors (RHP p.73, RHP p.297). Cash was ₹2.35 lakh (RHP p.73). By August 31, 2026 borrowings were ₹1,378.64 lakh, all secured, including ₹1,073.70 lakh of Axis Bank cash credit (RHP p.318, RHP p.121). The loans are secured on stock, receivables and properties of Jai Agarwal and Prem Lata Agarwal, who have also given personal guarantees (RHP p.316, RHP p.317).

Contingent liabilities were ₹276.84 lakh, one income-tax demand (RHP p.76). There were no capital commitments (RHP p.51). The company owns no immovable property; its office, both units and a maintenance store are rented (RHP p.208).

Source: (RHP p.73). The right-hand column is our arithmetic: ₹1,852.42 lakh of gross fresh-issue proceeds added, ₹580.26 lakh of it used to repay debt (RHP p.111), before issue expenses and before any capital spending.

08What the money is for

Source: (RHP p.111); the percentages are our arithmetic on gross fresh-issue proceeds of ₹1,852.42 lakh.

The new unit: a 45,000 sq ft pre-engineered building (₹440.61 lakh), rice papad and packing machinery (₹281.49 lakh) and a 250 kW rooftop solar system (₹67.90 lakh) (RHP p.114). The GST of ₹79.31 lakh on the building is to come from internal accruals (RHP p.116). No orders have been placed (RHP p.43). Commercial production is scheduled for January 2028 (RHP p.119). The rice papad work now done at the rented Karni unit is to move there, and the Karni unit is to close (RHP p.113). The prospectus also gives the project cost as ₹782.19 lakh in two places (RHP p.62, RHP p.172).

The land: owned by promoter Jai Agarwal and leased to the company for 15 years from February 1, 2026 at ₹1.80 lakh a month (RHP p.114). The company says it is eligible for a state capital subsidy of 50% of the investment, up to ₹1.50 crore, paid at 5% a year over 10 years (RHP p.114).

The debt: up to ₹580.26 lakh of the Axis Bank cash credit, which carried interest at repo rate plus 2.25% (RHP p.121).

The balance: at ₹72 the fresh issue leaves ₹482.16 lakh for general corporate purposes and the company's share of issue expenses, our arithmetic (RHP p.111). General corporate purposes may not exceed 15% of gross proceeds or ₹10 crore, whichever is lower (RHP p.111). No monitoring agency will oversee the proceeds, because the issue is below ₹5,000 lakh (RHP p.125).

Into the business: 25,72,800 new shares, ₹1,852.42 lakh at the upper band before expenses, our arithmetic (RHP p.69). To the selling shareholder: 2,30,400 shares, ₹165.89 lakh at the upper band, our arithmetic (RHP p.69).

09Who is selling

Source: (RHP p.105, RHP p.110); the last column is our arithmetic. The fund's average cost is ₹43.11 a share (RHP p.105). No promoter is selling, and the promoters and promoter group will not take part in the offer (RHP p.107).

10Promoters

The promoters are Jai Agarwal, Prem Lata Agarwal and Aanya Agarwal (RHP p.280). The prospectus states that Jai Agarwal and Prem Lata Agarwal are spouses and that Aanya Agarwal is their daughter (RHP p.266). Jai Agarwal, 43, chairman and managing director, has more than thirteen years in food processing, according to the prospectus (RHP p.265). Prem Lata Agarwal, 46, whole-time director, heads human resources (RHP p.265). Aanya Agarwal, 19, a student, joined the board as a non-executive director on July 15, 2025 and was identified as a promoter on January 30, 2026 (RHP p.265, RHP p.281).

Jai Agarwal is a director and shareholder of Bhujialalji Private Limited and Kachoree Club Private Limited, which make namkeen, sweets and kachoris; Prem Lata Agarwal is a director of Bhujialalji Private Limited (RHP p.281, RHP p.282). Bhujialalji had revenue of ₹2,867.08 lakh and a negative net worth of ₹98.53 lakh in FY26; Kachoree Club lost ₹237.94 lakh in FY25 (RHP p.385, RHP p.386).

Pay was ₹33.00 lakh to Jai Agarwal and ₹27.00 lakh to Prem Lata Agarwal in FY24, and ₹30.00 lakh and ₹15.00 lakh in FY26 (RHP p.77). From May 2025 the approved limits are up to ₹5,00,000 and ₹4,00,000 a month (RHP p.267). No promoter shares are pledged (RHP p.101). There is no litigation against the promoters (RHP p.351).

Promoter economics: the average cost is ₹1.11 a share for Jai Agarwal, ₹1.10 for Prem Lata Agarwal and ₹9.00 for Aanya Agarwal (RHP p.105). The share history:

• December 19, 2017: 4,00,000 shares to Jai Agarwal and 1,00,000 to Prem Lata Agarwal at ₹10 (RHP p.101).
• February 14, 2018: Prem Lata Agarwal transferred 37,886 shares to Puneet Bothra at ₹10 (RHP p.101).
• 2018 to 2020: 2,57,732 shares issued to India Customer Insight Fund at ₹388, ₹1,000.00 lakh in all (RHP p.94, RHP p.261).
• October 15, 2024: Prem Lata Agarwal transferred 100 shares to Aanya Agarwal and one share each to three relatives at ₹81 (RHP p.101).
• September 23, 2025: an 8-for-1 bonus issue of 60,61,856 shares (RHP p.94).

11Who already owns it

Source: (RHP p.105); the new shareholders' share is from the offer terms (RHP p.3).

The company has eight shareholders (RHP p.107). India Customer Insight Fund, a SEBI-registered alternative investment fund, invested in 2018 (RHP p.160). Its shareholders' agreement gave it the right to nominate two directors, a right of first refusal and exit rights; these were suspended on February 16, 2026 and end when the IPO is completed, but revive if it is not (RHP p.260, RHP p.261).

The fund's shares that remain after the offer are not locked in (RHP p.104). Of the promoters' shares, 19,00,009, or 20.23% of the enlarged capital, are locked in for three years (RHP p.102). The promoters hold 44.28% after the issue (RHP p.105). There is no anchor portion in this offer (RHP p.71).

12What changed just before the IPO

• FY25: brought-forward tax losses were used up; FY26 carried a current tax charge of ₹178.61 lakh (RHP p.309).
• October 24, 2024 and May 2025: groundnut trading and paddy and rice trading stopped (RHP p.170).
• January 28, 2025: conversion to a public company certified (RHP p.78).
• April 1, 2025: a 33-month rent agreement with Jai Agarwal for the registered office and Gharsisar unit at ₹1,30,000 a month (RHP p.47).
• May 2025: two independent directors appointed on May 17 and director Santosh Desai resigned on May 20 (RHP p.270).
• May 5, 2025: new pay terms for the two executive promoters (RHP p.267).
• August 1, 2025: statutory auditor Abhishek V Jain & Co. resigned; GGPS And Associates was appointed on August 18, 2025 (RHP p.84, RHP p.85).
• September 23, 2025: 8-for-1 bonus issue (RHP p.94).
• January 30, 2026: Aanya Agarwal identified as a promoter (RHP p.281).
• February 1, 2026: 15-year lease of the Bachhasar land from Jai Agarwal (RHP p.114).
• FY26: director loans fell from ₹232.49 lakh at March 2024 to ₹22.05 lakh at March 2026 (RHP p.297); inventory rose ₹683.95 lakh (RHP p.75).
• Margins: operating EBITDA margin moved from 12.58% in FY24 to 25.16% in FY26 (RHP p.130).

13Capacity and expansion

Source: (RHP p.212, RHP p.213, RHP p.119).

Capacity is worked out on 336 days, four shifts and nine hours a shift, and certified by an independent chartered engineer (RHP p.212). Installed capacity was unchanged over FY24 to FY26 (RHP p.130). The KPI table prints FY26 rice papad output as 1,02,031 kg, while the capacity table gives 10,20,031 kg, which matches the 93.15% utilisation (RHP p.130, RHP p.213). The prospectus does not state the installed capacity of the Bachhasar unit in kilograms, and no capacity or revenue from it is estimated here.

14Market size and industry structure

As claimed: the company did not commission an industry report; the industry chapter uses data available online (RHP p.53). Citing a Research and Markets report, it puts the India snacks market at INR 48,543.1 crore in 2025 (RHP p.151, RHP p.154). The prospectus does not size the papad market.

The part that is addressable: packaged papads and related products sold through shops and retail chains, mostly in Rajasthan, Haryana and Assam, which together were 71.98% of FY26 revenue (RHP p.33). The prospectus does not size that market.

What the company is today: FY26 revenue of ₹3,353.48 lakh (RHP p.74), about 0.07% of the snacks figure, our arithmetic (RHP p.151). Papad is one part of that market, so the share of the papad market cannot be worked out.

Structure: the company describes the papad industry as fragmented, with many regional, unorganised and small manufacturers and low entry barriers (RHP p.36). It also competes with chips, namkeens and other packaged snacks (RHP p.58). Raw materials come mostly from Rajasthan, with some from Gujarat and Madhya Pradesh (RHP p.56).

15Competitive position

The prospectus names no competitor and gives no competitor figures, so a comparison table cannot be filled (RHP p.129). It says competition turns on price, brand recognition, quality and distribution reach (RHP p.36).

Its stated strengths are a distribution network of 76 distributors and 30 wholesalers serving 8,710 retail outlets (RHP p.167), a range of products and brands, and the handmade model (RHP p.127). It holds ISO 22000:2018 certification at the Gharsisar unit (RHP p.160). Two applications for Vishal device marks, filed in 2016, are opposed by third parties, and several logos are unregistered (RHP p.44, RHP p.45). No general trade customer is bound by a contract or order book (RHP p.34).

16Peers the company named

Peers named in the offer document: none. The prospectus says there are no listed companies engaged exclusively in manufacturing papad or of comparable size, and gives no peer comparison (RHP p.129).

17Valuation at the issue price

At the upper band of ₹72, with 25,72,800 new shares added to 68,19,588 existing shares (RHP p.69):

Source: our arithmetic on shares (RHP p.69), profit (RHP p.74), EPS (RHP p.127), book value per share (RHP p.129) and EBITDA (RHP p.130).

At the lower band of ₹69 the market capitalisation is ₹6,480.75 lakh, our arithmetic (RHP p.69). Enterprise value takes the 68,19,588 existing shares at ₹72, ₹4,910.10 lakh, adds March 2026 borrowings of ₹998.56 lakh and deducts cash of ₹2.35 lakh (RHP p.73). After the issue, book value including the gross fresh proceeds would be about ₹3,466.60 lakh, and the market capitalisation at ₹72 about 2.0 times that, our arithmetic (RHP p.73). On the weighted average EPS of ₹6.65 that the prospectus also prints, ₹72 is 10.8 times (RHP p.127). The weighted average cost of the last transactions reported, the October 2024 transfers, is ₹9.00 a share (RHP p.135).

The prospectus names no listed peers, so there is no peer range to place the issue in (RHP p.129). At the upper band the issue is priced at 13.0 times FY26 profit on the enlarged share count and 9.4 times FY26 EPS as the prospectus computes it.

18Subscription

From the NSE issue page, as carried in newboard's issue feed on 29 September 2026, the first day of bidding: bids for 1.23 times the shares on offer. The feed does not give the category split or the time of the reading. Individual investors must apply for at least two lots, so that each application is above ₹2 lakh (RHP p.10); at the upper band two lots of 1,600 shares cost ₹2,30,400. The offer reserves not less than 18,40,000 shares for individual investors and not more than 32,000 for qualified institutions (RHP p.69).

19Risks, in plain words

Cash and inventory: stocks are large and growing (RHP p.36) → profit is being held as inventory rather than cash → inventory was ₹2,498.61 lakh at March 2026 (RHP p.73), and operating cash flow was ₹55.72 lakh in FY26 against profit of ₹521.26 lakh (RHP p.75).

Customers and channels: general trade has no contracts or order book (RHP p.34), and modern trade works on purchase orders (RHP p.160) → orders can stop at short notice → the top ten customers were 45.94% of FY26 revenue (RHP p.222).

One product, one town: papad and related products make nearly all revenue (RHP p.32), and all production is in Bikaner (RHP p.33) → a local disruption or a change in taste reaches the whole company → Rajasthan was 50.42% of FY26 revenue (RHP p.33).

Handmade model: handmade papads are rolled at home by workers the company does not employ (RHP p.229) → quality and hygiene are outside its direct supervision (RHP p.35) → handmade papads were 41.33% of FY26 revenue (RHP p.170).

Premises and the promoter: the registered office and Gharsisar unit are rented from Jai Agarwal, and the new unit will stand on land leased from Jai Agarwal (RHP p.46, RHP p.114) → the company's production sites depend on leases with its promoter → rent of ₹19.27 lakh was paid to Jai Agarwal in FY26 (RHP p.77). Registration formalities for the rent agreements are pending (RHP p.59).

Debt: bank borrowings are repayable on demand (RHP p.43) and secured on promoter property and guarantees (RHP p.36) → a withdrawal of either could force repayment → borrowings were ₹1,378.64 lakh at August 31, 2026 (RHP p.121).

Workforce: attrition among labour and operations support staff was 146.82% in FY26 (RHP p.60) → production depends on replacing workers quickly → the company had 118 employees and 22 contract labourers at March 2026 (RHP p.229).

Compliance record: late Registrar of Companies filings, including four share allotment returns 45 to 137 days late (RHP p.31), and late GST, provident fund, ESI and TDS payments (RHP p.40, RHP p.41) → penalties could follow → the Gharsisar unit never received a formal consent to operate, which the company says was not required (RHP p.59).

Issue-specific: no monitoring agency (RHP p.54); no orders placed for the new unit and its approvals not yet applied for (RHP p.43, RHP p.30); general corporate purposes and issue expenses left blank (RHP p.111).

20Litigation and regulatory matters

The income-tax matter concerns premium of ₹7.79 crore on shares issued under the shareholders' and share purchase agreements; the tax department held that the valuation did not support the pricing (RHP p.51). The litigation chapter lists direct tax claims against the company as "Nil" on one page and as one case of ₹276.84 lakh on another (RHP p.350, RHP p.353). The same chapter says the company has no group companies (RHP p.350), while the group companies section names two (RHP p.385).

21Related-party transactions

Source: (RHP p.77); totals across the two promoters are our arithmetic.

The prospectus prints a total of ₹446.41 lakh of related-party transactions in FY26, most of it loans taken and repaid (RHP p.77). At March 2026 Jai Agarwal was owed ₹22.05 lakh in loans, and the company was owed ₹8.27 lakh by Jai Agarwal and ₹19.80 lakh by Premlata Agarwal (RHP p.77). Kachoree Club Private Limited lent the company ₹12.00 lakh in FY26 and was paid ₹14.00 lakh (RHP p.77).

What appeared or disappeared: interest on promoter loans fell to almost nothing in FY26 as the loans were repaid (RHP p.77, RHP p.335); rent to Jai Agarwal began in FY26 under the April 2025 agreement (RHP p.47, RHP p.77); the Bachhasar land lease began in February 2026 (RHP p.114); a company secretary and a chief financial officer were paid from FY26 (RHP p.77).

22What the offer document does not say

The customers and suppliers are not named. Volumes sold and realisations are not given, so volume and price cannot be separated. Handmade papad output and the number of Bataris are not stated. Why packing material stock is about 5.4 times a year's consumption is not explained. The installed capacity of the Bachhasar unit is not given. General corporate purposes, the issue expenses and the post-issue book value are left blank.

No listed peer is named, so there is no peer valuation.

Several figures differ within the document: FY26 customer concentration (RHP p.24, RHP p.222), FY26 handmade papad revenue of ₹1,386.04 lakh in the product table and ₹1,051.60 lakh in the vertical table (RHP p.170, RHP p.166), March 2026 inventory of ₹2,498.61 lakh in the balance sheet and ₹2,416.62 lakh in the working capital table (RHP p.73, RHP p.28), the project cost (RHP p.111, RHP p.62), and the 5,00,000 founding shares, described both as a cash subscription and as consideration for the proprietorship business (RHP p.94, RHP p.259).

23Five questions for management

1. Why was packing material stock ₹816.06 lakh at March 2026 when ₹151.33 lakh of packing material was consumed in FY26, and how old is that stock?
2. How many kilograms of each product were sold in FY24 and FY26, and at what price per kilogram?
3. What installed capacity in kilograms will the Bachhasar unit have, and what utilisation does it need to cover its depreciation and the ₹1.80 lakh monthly lease?
4. How much of the ₹2,498.61 lakh of inventory at March 2026 had been used or sold by September 2026?
5. What were the premium and valuation basis on the shares that the income-tax department reassessed for AY 2019-20, and how were the 5,00,000 founding shares paid for?

1Sources and cited facts

This study was read from 1 document the company filed. The 169 figures it cites are listed under the document each came from, with the page and the sentence as printed.