Shellz India Limited IPO

01At a glance

Shellz India IPO date, price band and lot size

• Price band: ₹170 to ₹179 a share, from BSE's issue page; the prospectus leaves the price blank (RHP p.3).
• Lot size: 800 shares, from BSE's issue page. An application must be for at least two lots and above ₹2.00 lakh (RHP p.389), so the smallest bid is 1,600 shares, ₹2,86,400 at the upper band (our arithmetic).
• Dates: anchor bidding on October 14, 2026; the issue opens on October 15, 2026 and closes on October 19, 2026 (RHP p.3).
• Size: a fresh issue of up to 33,50,400 shares and no offer for sale (RHP p.1); ₹60.0 crore at the upper band and ₹57.0 crore at the lower band (our arithmetic, RHP p.3).
• Who gets the shares: 3,29,600 shares are reserved for the market maker and 30,20,800 form the net issue (RHP p.82); of the net issue not more than 50% is for qualified institutions, not less than 15% for non-institutional bidders and not less than 35% for individual bidders (RHP p.3).
• Lead manager and others: Socradamus Capital Private Limited is the sole book running lead manager, Bigshare Services Private Limited the registrar (RHP p.3), Mansi Share and Stock Broking Private Limited the market maker (RHP p.99) and Care Ratings Limited the monitoring agency (RHP p.96).

What the company does: makes and sells packaged confectionery, mainly baked treats, chocolate and milk products, jellies and sugar candies, almost all under its Hugs brand at ₹10 or less, plus food and bakery ingredients (RHP p.193, RHP p.194).

Who pays it: super stockists, who purchase in bulk and pass the goods down to distributors, wholesalers and kirana shops; they were 95.91% of FY26 revenue (RHP p.205). The largest customer was 13.20% of FY26 revenue and the top ten 62.93% (RHP p.37). Customers are not named (RHP p.37).

Why it is raising money: ₹22.0 crore to repay or prepay loans and ₹23.0 crore for working capital, with the rest for general corporate purposes (RHP p.113).

How fast it has grown: revenue from ₹162.4 crore in FY24 to ₹192.6 crore in FY26, and profit after tax from ₹5.3 crore to ₹13.4 crore (RHP p.85); our arithmetic puts the yearly growth at about 8.9% for revenue and 59.5% for profit (our arithmetic, RHP p.85).

The one thing to understand: profit grew far faster than sales because raw material cost fell as a share of revenue, while the business runs on heavy borrowing and long working capital. Borrowings were ₹100.8 crore at March 2026 against net worth of ₹59.0 crore (our arithmetic, RHP p.84), and the working capital cycle was 171 days in FY26 (RHP p.133).

02The business, in plain words

What Shellz India does

The company was incorporated in Delhi on May 07, 2012 as Tifosi Foods Private Limited, renamed Shellz India Private Limited in 2020 and became Shellz India Limited, a public company, with a certificate dated February 04, 2025 (RHP p.3). It began with jelly and chocolate products under the Hugs brand at its Delhi plant (RHP p.231).

What it sells, share of FY26 revenue (RHP p.200):

• Choco delights: chocolate and milk products in bars, centre-filled and coated formats, 48.06%.
• Baked treats: biscuit, wafer and cone snacks with cream or chocolate fillings, such as Push Up the Cone and Dip Sticks, 28.38%.
• Jellies: fruit jellies and puddings in cups, 12.05%.
• Food and bakery ingredients: cocoa products, custard powder and premixes for hotels, bakeries and institutions, 8.60%.
• Panned and sugar candies: 2.91%.

A child or young buyer wants a small treat → picks a ₹1, ₹2, ₹5 or ₹10 Hugs product at a kirana shop → Shellz India makes it from sugar, cocoa solids, milk solids, flour and vegetable fat at its Delhi plant, even moulding its own plastic cups → the company is paid by the super stockist, who sells on to distributors and shops.

Hugs brought 89.99% of FY26 revenue and Tosca, a costlier brand aimed at e-commerce and quick commerce, 1.41% (RHP p.194). Push Up the Cone and Dip Sticks are priced at ₹5 and Choco Club at ₹1 (RHP p.196, RHP p.197). The company had 398 SKUs and 126 products in FY26 (RHP p.133). It also makes goods for other brands and exports a little: exports were 0.54% of FY26 revenue (RHP p.201).

Kapil Garg, a promoter, has over two decades in packaged food and has been with the business since it began (RHP p.195). The company had 258 full-time employees at August 31, 2026, 176 of them in production (RHP p.216, RHP p.217). The Hugs and Tosca trademarks are registered in the name of its subsidiary, Shellz Overseas Private Limited, and the company uses them under a trademark user agreement dated April 01, 2025 (RHP p.52).

Earnings equation: Revenue ≈ tonnes produced and sold × realisation per kilogram. The Delhi plant produced 11,375 tonnes in FY26 (RHP p.212), which works out to about ₹169 of revenue per kilogram produced (our arithmetic, RHP p.85, RHP p.212). The prospectus does not give tonnes sold or prices per product.

03Where the money comes from

By product, ₹ crore (RHP p.200):

By region, share of revenue (RHP p.38):

• North India 71.47% in FY24, 72.66% in FY25 and 75.34% in FY26; the company counts Jharkhand and Bihar as North India.
• East India 11.71%, South India 9.30%, West India 3.11% and exports 0.54% in FY26.
• Delhi NCR alone was 39.68% of FY26 revenue and Haryana 17.88% (RHP p.200).

By channel, FY26 (RHP p.205): super stockists 95.91%, online platforms 1.88%, private labelling 1.05%, modern trade 0.63% and exports 0.54%.

Shellz India customers: how concentrated the revenue is

Source: RHP p.37. The company served 622 customers in FY26 against 508 in FY24 (RHP p.37), and had 344 super stockists in FY26 against 384 in FY24 (RHP p.133). There are no long-term agreements with most customers; sales run on purchase orders (RHP p.36). Read from the filing: revenue does depend on a few customers, and more so each year, with the top ten at about six in every ten rupees in FY26.

04The growth record

Shellz India financials: revenue, profit and margins

Source: RHP p.84, RHP p.85, RHP p.86, RHP p.133; borrowings are long-term plus short-term borrowings (our arithmetic, RHP p.84). The three-month figures are not annualised.

Source: RHP p.133.

Our arithmetic over FY24 to FY26 (RHP p.85, RHP p.133):

• Revenue grew about 8.9% a year (our arithmetic, RHP p.85).
• EBITDA grew about 26.2% a year (our arithmetic, RHP p.133).
• Profit after tax grew about 59.5% a year (our arithmetic, RHP p.85).
• EBITDA margin rose 399 basis points, so 11.7% → 15.7% rounded (RHP p.133); PAT margin rose 370 basis points.

What sits around the record:

• Size: revenue went ₹162.4 cr → ₹192.6 cr from FY24 to FY26 (RHP p.85), and profit after tax ₹5.3 cr → ₹13.4 cr (RHP p.85).
• Materials: cost of materials plus the change in inventories was about 83.3% of revenue in FY24, 79.1% in FY25 and 73.4% in FY26 (our arithmetic, RHP p.85).
• Cash: operating cash flow was −₹11.3 crore in FY26 (RHP p.86), after advances of ₹26.8 crore to suppliers of machinery (RHP p.36). Over FY24 to FY26 it was about 0.71 times profit after tax (our arithmetic, RHP p.85, RHP p.86).
• Other income was ₹0.57 crore in FY26, about 2.9% of profit before tax (our arithmetic, RHP p.85).
• Customers: the largest customer was 13.2% of FY26 revenue (RHP p.37) and the top ten 62.9% (RHP p.37). North India was 75.3% of FY26 revenue (RHP p.38), and super stockists 95.9% (RHP p.47).
• Working capital: receivable days went 122 → 80 from FY24 to FY26 (RHP p.133); inventory days rose from 126 to 175 and the working capital cycle was 171 days in FY26 (RHP p.133).
• Debt: borrowings were ₹100.8 crore at March 2026 (our arithmetic, RHP p.84) against cash of ₹1.1 crore (RHP p.84); net debt was about 3.3× FY26 EBITDA (our arithmetic, RHP p.84, RHP p.133). Return on capital employed was 19.1% in FY26 on the company's measure (RHP p.133), and debt to equity 1.7 times (RHP p.133).
• Loans from the promoters: unsecured loans from related parties were ₹15.0 crore at June 30, 2026 (RHP p.60), with no detailed loan agreements and no fixed repayment schedules (RHP p.60).
• Goodwill: buying Shellz Overseas Private Limited in March 2026 for ₹24.99 crore added goodwill of ₹22.2 crore (RHP p.315).
• Contingent liabilities: ₹24.7 crore at March 2026, of which ₹20.6 crore disputed statutory demands (our arithmetic, RHP p.88).
• Cases against promoters: 6 criminal, 2 tax and 5 civil matters against the promoters (RHP p.33); section 23 has the detail.
• The issue: a fresh issue of ₹60.0 crore at the upper band (our arithmetic, RHP p.3) and no offer for sale (RHP p.1), with ₹22.0 crore of the proceeds for loan repayment (RHP p.113).
• Valuation at the upper band: a market capitalisation of ₹216.0 crore (our arithmetic, RHP p.102) and a P/E of 16.2× on FY26 profit after tax on the enlarged share count (our arithmetic, RHP p.85, RHP p.102). The one listed peer the prospectus names, Annapurna Swadisht Limited, traded at 8.7× (RHP p.132), so the issue is +87% against that peer median (our arithmetic, RHP p.132). Section 16 has the detail.
• Industry: packaged confectionery, food and beverages in the fixed list (RHP p.145).

05What the growth is made of

Revenue rose by ₹30.2 crore from FY24 to FY26 (our arithmetic, RHP p.85). The record splits into two years:

• FY24 to FY25: revenue rose 15.1% (our arithmetic, RHP p.85). Delhi output rose from 9,547 tonnes to 11,482 tonnes, about 20.3% (our arithmetic, RHP p.212), as installed capacity went from 15,150 to 17,100 tonnes (RHP p.212). Jellies grew 52.69% and choco delights 20.95% (RHP p.333).
• FY25 to FY26: revenue rose 3.02% (RHP p.329) while output slipped to 11,375 tonnes (RHP p.212). Choco delights rose 48.35% and baked treats fell 37.90% (RHP p.329). The company puts the movement down to changes in product category contribution and portfolio mix (RHP p.330).

Revenue per kilogram produced was about ₹163 in FY25 and ₹169 in FY26 (our arithmetic, RHP p.85, RHP p.212). The prospectus does not disclose tonnes sold, prices or volumes by product, so the increase cannot be separated cleanly into volume and price.

The margin rise came mostly from materials. Raw material consumed fell from 58.13% of revenue in FY25 to 42.37% in FY26 (RHP p.212); purchases fell from ₹109.0 crore to ₹94.6 crore (RHP p.330) while finished goods inventory was drawn down by ₹13.4 crore (RHP p.331). Rebates and discounts rose from ₹2.1 crore to ₹4.6 crore (RHP p.332).

06Earnings quality

The one that needs explaining is the cash. FY26 operating cash flow was negative mainly because of advances of ₹26.8 crore to suppliers of machinery for the Sonipat plant, which sat in working capital (RHP p.36, RHP p.126). Inventory was ₹70.2 crore at March 2026, 45.04% of current assets (RHP p.84, RHP p.39). Disputed receivables older than three years were ₹2.7 crore at March 2026 (RHP p.59), and the company has no formal credit policy (RHP p.58). The prospectus also records that a supplier was wrongly reported in past accounts as a struck-off company (RHP p.49).

07The balance sheet

At March 2026 (RHP p.84):

• Long-term borrowings ₹46.0 crore and short-term borrowings ₹54.8 crore; cash ₹1.1 crore.
• Inventories ₹70.2 crore, trade receivables ₹48.6 crore, short-term loans and advances ₹29.9 crore.
• Goodwill and intangible assets ₹22.2 crore, capital work in progress ₹11.3 crore, net worth ₹59.0 crore.

At June 30, 2026 total outstanding borrowings, including a bank guarantee, were ₹109.5 crore against sanctions of ₹112.8 crore (RHP p.342). Of these, ₹15.0 crore were unsecured loans from related parties and ₹12.4 crore unsecured loans from non-bank lenders (RHP p.342). Interest on the loans picked for repayment runs from 9.00% to 15.25% (RHP p.116, RHP p.120). There have been delays in repaying principal or interest that appear in credit reports, and one unsecured loan has been recalled by its lender (RHP p.32). The promoters have given personal guarantees for many loans (RHP p.232).

Contingent liabilities at March 2026 were ₹3.2 crore of claims not acknowledged as debts, ₹20.6 crore of disputed statutory demands and ₹0.93 crore of bank guarantees (RHP p.88).

After the issue: at the upper band the fresh issue adds ₹60.0 crore before expenses (our arithmetic, RHP p.3), against net worth of ₹59.0 crore at March 2026 (RHP p.84). If ₹22.0 crore is used to repay loans (RHP p.113), March 2026 borrowings of ₹100.8 crore would fall to about ₹78.8 crore (our arithmetic, RHP p.84).

08What the money is for

Shellz India IPO objects: what the money is for

Source: RHP p.113; percentages are our arithmetic on a fresh issue of ₹60.0 crore (RHP p.3). Both amounts are to be spent in FY27 (RHP p.114). General corporate purposes may not exceed 15% of the gross proceeds or ₹10.0 crore, whichever is lower (RHP p.113); issue expenses are left blank (RHP p.128).

• Loans: the borrowings picked for repayment had ₹28.7 crore outstanding at August 31, 2026, mostly machinery loans from non-bank lenders (RHP p.115, RHP p.121). The company may repay other loans instead (RHP p.122).
• Working capital: the company projects working capital of ₹95.1 crore for FY27, funded partly by ₹23.0 crore from the issue (RHP p.124, RHP p.125). It plans for inventory days to fall to 155 and receivable days to 60 in FY27 (RHP p.125); these are the company's own projections.

Into the business the whole issue: up to 33,50,400 new shares, ₹60.0 crore at the upper band (our arithmetic, RHP p.3). To selling shareholders nothing: there is no offer for sale (RHP p.1).

09Who is selling

Shellz India IPO offer for sale: who is selling

No one. The issue is a fresh issue only (RHP p.1), and the promoters will not take part or receive any of the proceeds (RHP p.112).

10Promoters

The promoters are Kapil Garg, chairman and managing director, and Shalini Garg, a non-executive director; the prospectus records that the two are spouses and the parents of Pavil Garg, who leads strategy and operations (RHP p.250, RHP p.236, RHP p.202). Shalini Garg was named a promoter in March 2025 to meet the promoter-contribution rules (RHP p.250). Both have about twenty years in confectionery according to the prospectus (RHP p.235).

Other businesses: the promoters are linked to Winola India Private Limited, Skyway Polymers Private Limited and Euroville Private Limited, which are in the same line of business (RHP p.251), and the company buys from and sells to some of them (section 24). Both promoters left Shellz Overseas Private Limited on March 22, 2026 "pursuant to share transfer", when the company bought all its shares (RHP p.251, RHP p.232).

Promoter economics (our arithmetic, RHP p.106):

• Kapil Garg holds 62,40,000 shares at an average cost of about ₹8.06 a share, built from allotments at ₹10 to ₹90 between 2012 and 2016, purchases at ₹340 in 2023 and the bonus issue.
• Shalini Garg holds 14,40,000 shares bought from Shellz Overseas Private Limited in March 2025 at ₹419 a share before the bonus, ₹34.92 after it (RHP p.138).
• None of the promoters' shares is pledged (RHP p.106).

Pay: Kapil Garg's remuneration was ₹0.03 crore in FY24 and FY25 and ₹0.15 crore in FY26 (RHP p.89); the current terms are ₹0.18 crore a year (RHP p.236). Shalini Garg drew sitting fees from the company and ₹0.06 crore from the subsidiary in FY26 (RHP p.237). The promoters had lent the company ₹15.0 crore at June 30, 2026 (RHP p.91).

11Who already owns it

Shellz India promoter holding before and after the IPO

Source: RHP p.111, RHP p.110; the "others" line is our arithmetic. The company had 15 shareholders (RHP p.111).

If the whole issue is allotted, the shares rise to 1,20,67,104 (RHP p.102) and the promoters would hold about 63.6% (our arithmetic, RHP p.105, RHP p.102), down from 88.1% (RHP p.105).

The outside holders came in through three preferential allotments: 47,435 shares at ₹1,165 in August 2024, 5,400 shares at ₹1,490 in February 2025 and 33,557 shares at ₹1,490 in September 2025 (RHP p.103), which is ₹97.08 and ₹124.17 a share after the bonus (RHP p.137). Arwa Umesh took 13,750 shares in 2024 and 28,523 in 2025 (RHP p.104).

12What changed just before the IPO

• Auditor: Kumar V & Associates left at the end of its term on September 30, 2024 and RSAV & Company was appointed for FY25 to FY29 (RHP p.94).
• Preferential allotments: at ₹1,165 in August 2024 and ₹1,490 in February and September 2025 (RHP p.103).
• Share transfer: Shellz Overseas Private Limited sold its 1,20,000 shares to Shalini Garg in March 2025 at ₹419 (RHP p.106).
• Board: two independent directors joined in November 2024 and February 2025, and Kapil Garg became chairman and managing director in March 2025 (RHP p.238).
• Public company: converted with a certificate dated February 04, 2025 (RHP p.3).
• Bonus issue: 11 new shares for each share held, 79,90,312 shares, on November 10, 2025 (RHP p.103).
• Registered office: moved to West Punjabi Bagh on October 08, 2025 (RHP p.230).
• Acquisition: in March 2026 the company bought 100% of Shellz Overseas Private Limited, which owns the Hugs and Tosca trademarks (RHP p.232, RHP p.52), for ₹24.99 crore, booking goodwill of ₹22.2 crore (RHP p.315); ₹24.4 crore had been paid in advance in FY25 (RHP p.337).
• Pay: the managing director's remuneration went from ₹0.03 crore in FY25 to ₹0.15 crore in FY26 (RHP p.89).
• Factory licence: the Delhi plant had no valid factory licence from April 1, 2025 to May 20, 2026 (RHP p.35).
• New plant: the Sonipat facility started in 2025, so far for packaging and warehousing (RHP p.231, RHP p.201).

13Capacity and expansion

Source: RHP p.211, RHP p.212, certified by a chartered engineer on a basis of 300 working days.

The company intends to shift all manufacturing from Delhi to Barhi, Sonipat (RHP p.34). The proposed installed capacity there is 34,500 tonnes, including 10,950 tonnes of new equipment in three phases (RHP p.212). No issue proceeds are earmarked for the Sonipat plant (RHP p.113); capital work in progress was ₹23.7 crore at June 30, 2026 (RHP p.84). The prospectus does not give a date for completing the move.

14Market size and industry structure

Shellz India industry: market size and growth

The industry chapter is taken from "India's Confectionery Market", a report by Ken Research dated March 25, 2026, which the company commissioned and paid for for this issue (RHP p.145). Every figure below is the commissioned report's, as reproduced in the prospectus.

As claimed: India's confectionery market grew from ₹55.2 thousand crore in FY19 to ₹93.1 thousand crore in FY25, about 9.1% a year (RHP p.138). The report defines it as all sweet foods sold in India for indulgence and snacking, made here or imported, across all channels (RHP p.160).

The part that is addressable: Shellz India sells mostly at ₹10 or less (RHP p.194). The report sizes this economy segment, products priced ₹1 to ₹10, at ₹50.5 thousand crore in FY25 (RHP p.170), up from ₹30.6 thousand crore in FY19 at about 10.5% a year (RHP p.127). The company's sales are concentrated in North India (RHP p.38); the report does not size the economy segment for North India alone.

What the company is today: FY25 revenue of ₹187.0 crore (RHP p.85) was about 0.37% of the economy segment that year (our arithmetic, RHP p.85, RHP p.170).

Size over time: the report projects the whole market at ₹125.8 thousand crore by FY30, about 6.3% a year from FY25 (RHP p.162), and the economy segment at ₹76.4 thousand crore by FY30 (RHP p.127). It expects growth in the economy segment to moderate as tastes move toward premium products (RHP p.170). These projections are the report's, not newboard's.

Segments: by product, baked confectionery was ₹56.2 thousand crore in FY25, chocolate and milky confectionery ₹23.0 thousand crore and sugar confectionery ₹13.9 thousand crore (RHP p.162, RHP p.163). The report projects chocolate and milky to grow fastest, about 8.6% a year to FY30, and sugar confectionery slowest, about 3.5% (RHP p.163). Shellz India's sales are mainly choco delights and baked treats (RHP p.200). Domestic brands held ₹62.4 thousand crore of FY25 sales (RHP p.163). By channel, general trade was ₹64.1 thousand crore, modern trade ₹18.3 thousand crore and online ₹10.7 thousand crore in FY25 (RHP p.139).

What drives demand: low consumption per person, 0.39 kg in FY25 against 14.4 kg in Germany and 9.1 kg in the USA, with total consumption of 576 million kg (RHP p.152); a young population; and small packs. Products at ₹1 to ₹10 had the highest purchase intent in the report's survey of 500 people, 86% (RHP p.149). Kirana shops were about 92% of grocery sales in FY24 (RHP p.139). The report also names government schemes such as the production-linked incentive scheme for food processing (RHP p.139).

Structure: the report counts about 20 large players, including Mondelez, Nestlé, Perfetti Van Melle, Mars and Ferrero, and more than 30 smaller companies, including Shellz India, Prayagh Consumer, Kayempee Foods and Annapurna Swadisht (RHP p.187). Organised companies held 60.7% of the FY25 market and unorganised ones 39.3% (RHP p.181); organised sales were ₹56.5 thousand crore in FY25 (RHP p.166). A typical manufacturer keeps 50% to 70% of the retail price, with the super stockist taking 3% to 4% and the retailer 15% to 20% (RHP p.151).

Inputs and trade: the main inputs are sugar, cocoa, milk solids, flour and edible fats, all bought at market prices (RHP p.212). The report cites ex-mill sugar in Maharashtra rising 6.5% in one month in early 2025 (RHP p.181). India's confectionery exports grew from USD 355.0 million in CY20 to USD 777.4 million in CY25 (RHP p.154).

Rules: the Food Safety and Standards Authority of India, the Bureau of Indian Standards and the Directorate General of Foreign Trade govern safety, standards and trade (RHP p.187), and the food safety regulator's rules cover sugar content and labelling (RHP p.184, RHP p.185).

What the chapter says can go wrong: low brand loyalty in the value segment, where buyers switch for small price changes; margin pressure when input costs rise but pack prices stay fixed at ₹1 to ₹10; cheaper unorganised rivals; seasonal demand, with some Indore makers reporting sales falls of up to 40% off season; healthier eating; and export rejections, over 500 in the EU since 2020 (RHP p.180, RHP p.181, RHP p.182).

15Competitive position

Shellz India competitors

Source: the Ken Report as reproduced at RHP p.191 and RHP p.192. The report's FY25 profit for Shellz India, ₹8.9 crore, differs from the restated ₹8.3 crore (RHP p.85).

The company says there is no listed company focused only on packaged confectionery, so it has no directly comparable peer group (RHP p.216). The prospectus describes Prayagh as serving almost 500,000 retail outlets and Annapurna Swadisht as having added about 300 distributors through its purchase of Madhur Confectioners (RHP p.216). The company's own case rests on in-house manufacturing, products at mass price points and its super stockist network (RHP p.131). It does not own the Hugs and Tosca trademarks directly; its subsidiary does (RHP p.52), and its logo is not registered (RHP p.61).

16Peers the company named

Peers named in the offer document: Annapurna Swadisht Limited, as the closest comparable company (RHP p.132).

Shellz India listed peers

Source: RHP p.132, RHP p.136; the peer's P/E is at its closing price of ₹124.50 on October 09, 2026 against basic EPS of ₹14.38 (RHP p.132). Annapurna Swadisht's FY26 revenue was about 2.7 times Shellz India's (our arithmetic, RHP p.136), its debt to equity 0.69 against 1.71 and its working capital cycle 111 days against 171 (RHP p.136). It sells packaged foods as well as confectionery (RHP p.216).

17Valuation at the issue price

Shellz India IPO valuation and P/E

At the upper band of ₹179, with the full 33,50,400 new shares added to 87,16,704 existing shares (RHP p.102):

Source: RHP p.85, RHP p.102, RHP p.131, RHP p.132; our arithmetic. At the lower band of ₹170 the market capitalisation is ₹205.1 crore (our arithmetic, RHP p.102).

Enterprise value on the shares before the issue, with March 2026 borrowings of ₹100.8 crore and cash of ₹1.1 crore, is ₹255.7 crore, 8.5 times FY26 EBITDA of ₹30.1 crore (our arithmetic, RHP p.84, RHP p.133). After the issue, book value including the gross fresh issue would be about ₹118.9 crore, and the market capitalisation at the upper band 1.8 times that (our arithmetic, RHP p.84).

The one peer the prospectus names traded at 8.66 times earnings on October 09, 2026 (RHP p.132). At the upper band the issue is priced at 16.2 times FY26 profit on the enlarged share count, about 87% above that figure, and 11.6 times FY26 diluted EPS on the prospectus's own share basis.

18Risks, in plain words

Shellz India IPO risks

Debt → borrowings were ₹109.5 crore at June 30, 2026, including a guarantee (RHP p.342) → delays in debt service have appeared in credit reports and one unsecured loan was recalled (RHP p.32) → finance costs were ₹9.3 crore in FY26 (RHP p.85).

Working capital → inventory days rose from 126 to 175 between FY24 and FY26 (RHP p.133) → money stays locked in stock for months → the company still needs ₹23.0 crore of the issue for working capital (RHP p.113).

Customers and channel → the top ten customers were 62.93% of FY26 revenue (RHP p.37) and super stockists 95.91% (RHP p.47) → they work without long-term contracts and on a non-exclusive basis (RHP p.47) → the top ten rose to 69.18% in the three months to June 2026 (RHP p.37).

Region → North India was 75.34% of FY26 revenue (RHP p.38) → local events or competition there move the whole company.

Raw materials → materials consumed were 73.76% of FY26 total expenses (RHP p.36) → products are priced at fixed low points, so cost increases are hard to pass on (RHP p.181) → there are no long-term supply contracts (RHP p.212).

Relocation → all manufacturing is to move from Delhi to Sonipat (RHP p.34) → production may be disrupted during the move → the Sonipat plant's pollution consents were still applications at the date of the prospectus (RHP p.39).

Compliance → the Delhi plant ran without a valid factory licence for more than a year (RHP p.35), filings of GST and other returns were late in each of the last three years (RHP p.41) → five food safety matters over misbranded or substandard products are recorded (RHP p.350).

Legal and tax → disputed statutory demands were ₹20.6 crore at March 2026 (RHP p.88), against net worth of ₹59.0 crore (RHP p.84) → six insolvency petitions by suppliers were filed between 2019 and 2026 and later withdrawn or dismissed (RHP p.34).

Issue-specific → the objects have not been appraised by any bank or financial institution (RHP p.114), and general corporate purposes and issue expenses are not yet quantified (RHP p.113, RHP p.128).

19Litigation and regulatory matters

Cases against Shellz India and its promoters

The prospectus counts, against the company, 6 criminal matters, 9 tax matters, 5 regulatory actions and 11 material civil cases; and against the promoters, 6 criminal, 2 tax and 5 civil matters (RHP p.33).

Criminal: suppliers have filed cheque-dishonour complaints under Section 138 of the Negotiable Instruments Act against the company and the promoters, for cheques of about ₹0.09 crore, ₹0.07 crore and ₹0.15 crore; the company has applied to compound some of them (RHP p.349). Ujala Stainless Private Limited filed a complaint alleging forgery of a 2018 lease of a Sonipat property, registered as an FIR in January 2025 against the company and both promoters; the High Court has said no charge sheet may be filed, and a police final report obtained in June 2026 found no substance in the allegations (RHP p.349, RHP p.350).

Regulatory: the food safety regulator classed "American Cow" and "Choco Gold Coin" as misbranded and imposed penalties; two other products face pending notices, and a jelly pudding sample was reported substandard in July 2026 (RHP p.350).

Civil: supplier recovery suits against the company include claims of ₹1.88 crore by CVS Packaging Private Limited, ₹1.59 crore by the former partners of Baba Industries and ₹1.10 crore by Mohan Ram Trading Private Limited; the company disputes them, citing defective supplies (RHP p.353). The company has itself filed many cheque-dishonour complaints against its own customers (RHP p.354, RHP p.355).

The promoters face no disciplinary action by SEBI or the stock exchanges (RHP p.357).

20Related-party transactions

Source: RHP p.90. In the three months to June 2026 the company received further loans of ₹10.81 crore from Kapil Garg and ₹4.18 crore from Shalini Garg (RHP p.90). Pavil Garg, son of the promoters, was paid ₹0.12 crore a year (RHP p.89). The company had lent ₹1.93 crore to Skyway Polymers Private Limited at March 2026 (RHP p.91).

What appeared or disappeared: Shellz Overseas Private Limited, once a shareholder and a customer, became a wholly owned subsidiary on March 22, 2026 (RHP p.89, RHP p.232); the company now pays it under a trademark user agreement and uses premises it leases (RHP p.329, RHP p.71). Purchases from Euroville Private Limited began in FY26 (RHP p.90).

21What the offer document does not say

Tonnes sold, by product or in total, are not disclosed; only factory output is. Prices and margins by product category are not disclosed. Customers are not named. The pages read do not name who sold Shellz Overseas Private Limited to the company or how its price of ₹24.99 crore was set. No date is given for completing the move to Sonipat or for its cost. The amount for general corporate purposes and the issue expenses are left blank. The reasons for the delays in debt service recorded in credit reports are not set out beyond "temporary liquidity constraints or timing differences".

22Five questions for management

1. How many tonnes of each product category were sold in FY25 and FY26, and at what average price per kilogram?
2. Why did raw material consumed fall from 58.13% of revenue in FY25 to 42.37% in FY26, and how much of that came from drawing down finished goods stock?
3. Who sold Shellz Overseas Private Limited to the company, on what valuation, and what does the trademark user agreement cost each year?
4. What will the move to Sonipat cost in total, how will it be funded, and when will the Delhi plant close?
5. How much of the ₹20.6 crore of disputed statutory demands has been paid under protest, and what provision is held against it?

1Sources and cited facts

This study was read from 1 document the company filed. The 177 figures it cites are listed under the document each came from, with the page and the sentence as printed.