Shivchem Agro Limited IPO

01At a glance

What the company does: formulates and sells crop-protection products, insecticides, fungicides, herbicides, plant growth regulators, rodenticides and fertilizers, at one plant at Jhajjar in Haryana (RHP p.192, RHP p.207).

Who pays it: 685 distributors across Andhra Pradesh, Telangana, Odisha, Assam, Bihar and Haryana, served from five leased godowns; the largest customer was 7.64% of FY26 revenue and the top ten 28.71% (RHP p.43, RHP p.137).

Why it is raising money: ₹690.00 lakh for working capital and ₹350.00 lakh to repay borrowings, with general corporate purposes left blank (RHP p.115).

How fast it has grown: revenue rose from ₹1,094.25 lakh in FY24 to ₹3,381.59 lakh in FY26, about 75.8% a year, and profit after tax from ₹129.35 lakh to ₹324.86 lakh, about 58.5% a year (our arithmetic, RHP p.83).

The one thing to understand: the growth has consumed cash rather than produced it. Operating cash flow was minus ₹434.34 lakh in FY24, minus ₹299.85 lakh in FY25 and plus ₹179.25 lakh in FY26, against three years of profit of ₹714.36 lakh, because inventory and receivables grew faster than sales (RHP p.84).

02The business, in plain words

The company mixes bought-in technical active ingredients with fillers, solvents, emulsifiers and other additives into finished formulations in granule, water-dispersible granule, suspension-concentrate and emulsifiable-concentrate form, packs them under its own brand names and ships them to distributors (RHP p.192, RHP p.208, RHP p.209).

A farmer needs a pesticide → a distributor stocks it → the company formulates and packs it at Jhajjar from bought-in technicals → the company keeps what is left after materials, freight, godown costs and interest.

The company was incorporated in September 2021 and became a public limited company in November 2024 (RHP p.365). It holds a licence under the Insecticides Act, 1968 for 176 products, 88 insecticides, 40 fungicides, 37 herbicides, 8 plant growth regulators and 3 rodenticides, and a letter of authorisation for 82 fertilizers under the Fertilizer Control Order, 1985 (RHP p.192). It is licensed for sale in eight states and supplied six in FY26 (RHP p.192, RHP p.137). The plant covers 22,680 square feet and has an effluent treatment plant and a wet scrubber (RHP p.207). There were 66 employees and 39 sales staff at March 2026 (RHP p.137).

Earnings equation: Profit = litres or kilogrammes sold × (realisation − technical and packing cost) − distributor discounts − godown and freight cost − interest. In FY26 material consumed was ₹1,543.35 lakh and the change in inventories ₹323.34 lakh, a net material cost of 63.41% of total expenses, against revenue of ₹3,381.59 lakh (RHP p.42, RHP p.83).

03Where the money comes from

Source: RHP p.342.

By state, FY26 revenue was Andhra Pradesh 33.98%, Assam 20.82%, Haryana 19.76%, Telangana 16.49% and Odisha 8.64% (RHP p.48). Odisha and Bihar contributed nothing before FY26 (RHP p.48). New customers were 65.65% of FY26 revenue and repeat customers 34.35% (RHP p.343).

Source: RHP p.137.

Revenue does not depend on a few customers: no customer was more than 8.34% in any of the three years. It depends instead on a distributor network that went from 185 to 516 to 685 in three years, and on two states, Andhra Pradesh and Assam, that together were 54.80% of FY26 sales (RHP p.137, RHP p.48).

04The growth record

Source: RHP p.83, RHP p.138.

Net worth was ₹150.13 lakh, ₹967.18 lakh and ₹1,292.03 lakh; borrowings ₹709.82 lakh, ₹826.15 lakh and ₹727.52 lakh; return on net worth 151.37%, 46.57% and 28.76%; return on capital employed 37.55%, 31.99% and 30.04% (RHP p.82, RHP p.138).

Our arithmetic over the two years from FY24 to FY26: revenue rose about 75.8% a year, EBITDA about 76.0% a year and profit after tax about 58.5% a year; EBITDA margin moved 5 basis points and PAT margin fell 221 basis points (RHP p.83, RHP p.138). The company's own year-on-year figures are revenue growth of 379.07% in FY24, 150.99% in FY25 and 23.12% in FY26 (RHP p.342).

Earnings per share were ₹8.62, ₹11.96 and ₹6.16, the fall reflecting the share count rising from 50,000 to 52,72,873 through a bonus, a loan conversion, two placements and a split (RHP p.83, RHP p.103).

05What the growth is made of

Distribution and product range. Distributors went from 185 in FY24 to 516 in FY25 to 685 in FY26, the sales team from 17 to 22 to 39, licensed products from 232 to 258, and the states covered from five to six (RHP p.137). Herbicide revenue rose from ₹373.07 lakh to ₹1,472.02 lakh and fungicides from ₹75.19 lakh to ₹536.24 lakh, while insecticides fell from ₹1,615.48 lakh in FY25 to ₹1,025.36 lakh in FY26 (RHP p.342). Two states entered the mix in FY26: Odisha at ₹292.09 lakh and Bihar at ₹10.51 lakh (RHP p.48).

The volume side is visible: utilised capacity rose from 2,45,610 kg or litres of insecticide in FY24 to 7,65,757 in FY26, herbicides from 1,06,479 to 4,87,512 and fungicides from 52,067 to 1,07,027 (RHP p.207). Installed capacity did not change for those three categories across the period, so the increase is utilisation, not new plant (RHP p.208). The prospectus does not give realisation per kilogramme by product, so the revenue increase cannot be separated into volume and price.

06Earnings quality

Two items need explaining. The first is the working-capital cycle: raw material days went from 89 to 259 and receivable days from 87 to 151 in two years, and the company funded that partly by taking payable days from 99 to 317 (RHP p.118). Trade payables at March 2026 were ₹1,986.86 lakh against revenue of ₹3,381.59 lakh, and two creditors alone accounted for ₹1,285.66 lakh of that balance (RHP p.82, RHP p.363).

The second is the capital advances. The company paid ₹237.98 lakh to its two executive promoters under agreements for the sale of property, ₹102.42 lakh to Rohit Agarwal and ₹135.56 lakh to Sachin Agarwal (RHP p.43). The first purchase was cancelled and that advance was repaid to the company between April 1 and September 15, 2026; the second is still open, and the prospectus states that if the transaction fails through an uncured default by the company the seller may forfeit 10% of the consideration, up to ₹17.12 lakh (RHP p.43).

07The balance sheet

At March 2026, long-term borrowings were ₹279.91 lakh and short-term borrowings ₹447.61 lakh, a total of ₹727.52 lakh, against net worth of ₹1,292.03 lakh, a debt to equity ratio of 0.56 (RHP p.82, RHP p.138). Cash and cash equivalents were ₹12.84 lakh (RHP p.82). Trade payables were ₹1,986.86 lakh, none of it owed to micro and small enterprises, and other current liabilities ₹357.47 lakh (RHP p.82). Inventories were ₹2,056.47 lakh and receivables ₹1,693.56 lakh (RHP p.82). Property, plant and equipment was ₹362.87 lakh, with plant and machinery at a gross block of ₹207.15 lakh (RHP p.82, RHP p.208). There are no contingent liabilities, guarantees or capital commitments (RHP p.86).

After the issue: at the upper band the fresh issue raises ₹1,401.20 lakh before expenses, against net worth of ₹1,292.03 lakh, and ₹350.00 lakh of it repays borrowings, which would leave borrowings of about ₹377.52 lakh on the March 2026 figure (our arithmetic, RHP p.82, RHP p.115, RHP p.102).

08What the money is for

Source: RHP p.115.

The whole amount is scheduled for deployment in FY27 (RHP p.116). The working-capital case is set out in detail: the company puts its net working capital at ₹1,663.29 lakh at March 2026 and estimates ₹3,009.07 lakh at March 2027, to be funded by ₹200.00 lakh of short-term borrowing, ₹2,119.07 lakh of internal accruals and reserves and ₹690.00 lakh from the issue (RHP p.117).

Those March 2027 figures are the company's own estimates, and they assume receivable days falling from 151 to 104, raw material days from 259 to 107 and finished-goods days from 170 to 94 (RHP p.118). General corporate purposes are capped at 15% of the amount raised or ₹1,000 lakh, whichever is lower (RHP p.115).

Into the business the whole issue: 22,60,000 new shares, ₹1,401.20 lakh at the upper band before expenses (our arithmetic, RHP p.102). To selling shareholders nothing: there is no offer for sale (RHP p.102).

09Who is selling

No one. The issue is 22,60,000 new shares issued by the company, of which up to 1,14,000 are reserved for the market maker, leaving a net issue of 21,46,000 shares (RHP p.102). Of the net issue, at least 10,24,000 shares are for individual investors, at least 10,14,000 for non-institutional investors and not more than 1,08,000 for qualified institutional buyers (RHP p.102).

10Promoters

The promoters are Rohit Agarwal, Chairman and Executive Director, aged 35, with 12 years of experience; Sachin Agarwal, Managing Director, aged 42, with 6 years; and Deepa Agarwal, Non-Executive Director, aged 41, with 3 years (RHP p.281, RHP p.282). Rohit Agarwal and Sachin Agarwal are the original promoters and subscribed the memorandum in September 2021 with 25,000 shares each; Deepa Agarwal was added as a promoter by a board resolution of June 24, 2025 (RHP p.104, RHP p.283). None of the three holds a directorship elsewhere and the prospectus records no other venture for any of them (RHP p.281, RHP p.282). There is no corporate promoter (RHP p.283).

Promoter economics: the three promoters hold 47,52,920 shares, 90.14% of the capital before the issue (RHP p.281). The holdings were built at par on incorporation, then through a 14-for-1 bonus in September 2024, the conversion of ₹3,065.60 lakh of loans into 16,00,000 shares at ₹19.16 in October 2024 and a split of the ₹10 share into two ₹5 shares in November 2024 (RHP p.103, RHP p.104).

Deepa Agarwal purchased 53,000 shares on September 2, 2026, three weeks before the prospectus (RHP p.108). Directors' remuneration to Rohit Agarwal and Sachin Agarwal was ₹18.00 lakh each in FY24 and ₹6.00 lakh each in FY25 and FY26 (RHP p.87). Rohit Agarwal has given personal guarantees for company loan facilities (RHP p.58).

11Who already owns it

The company had 39 shareholders at the date of the prospectus, 4 in the promoter and promoter group and 35 in the public (RHP p.106). Promoters held 90.14% before the issue and would hold 63.10% after it; with the promoter group, Richa Agarwal, the figures are 92.73% and 64.91% (RHP p.108). Rohit Agarwal and Sachin Agarwal hold 44.57% each (RHP p.107).

The only public holder above 1% is Som Dev Dhawan at 1.12%; no fund, institution or company holds 1% or more before the issue (RHP p.107). AWA Endeavor LLP, which took both private placements and held 5.11% a year before the filing, is no longer on the 1% list (RHP p.107). Richa Agarwal, of the promoter group, purchased and sold shares repeatedly between August 7 and September 17, 2026, in twelve recorded transactions (RHP p.108).

The paid-up capital is 52,72,873 shares of ₹5 before the issue and 75,32,873 after it (RHP p.102).

12What changed just before the IPO

• A bonus of 14 shares for every 1 held, 7,00,000 shares, was allotted on September 27, 2024 by capitalising free reserves (RHP p.103, RHP p.105).
• ₹3,065.60 lakh of promoter loans was converted into 16,00,000 shares at ₹19.16 on October 7, 2024 (RHP p.104).
• A private placement of 1,72,800 shares at ₹87 to AWA Endeavor LLP was made on October 22, 2024, and a second of 2,27,273 shares at ₹44 on February 12, 2025 (RHP p.103, RHP p.104).
• The ₹10 share was split into two ₹5 shares on November 21, 2024 (RHP p.104).
• The company became a public limited company on November 19, 2024 (RHP p.365).
• The statutory auditor changed: Garg Goyal & Association resigned on February 18, 2025, and VMSM & Co. was appointed on March 3, 2025 in the casual vacancy and for five years on June 25, 2025 (RHP p.98).
• Capital advances of ₹237.98 lakh were paid to the two executive promoters for property purchases; ₹102.42 lakh was repaid to the company between April 1 and September 15, 2026 (RHP p.43).
• Rodenticides and fertilizers were added to the product range during FY25 (RHP p.208).
• Deepa Agarwal was added as a promoter in June 2025 and purchased 53,000 shares in September 2026 (RHP p.283, RHP p.108).

13Capacity and expansion

Source: RHP p.207; figures are in kilogrammes or litres on an annualised basis, certified by Sushant Aggarwal, Chartered Engineer, on September 12, 2026. Total capacity was 65,07,500 units in FY25 and FY26 against 56,00,000 in FY24 (RHP p.137). Installed capacity for insecticides, fungicides, herbicides and plant growth regulators has not changed since FY23; the machinery added in FY24 and FY25 was packing and filling equipment and tools (RHP p.208).

Nothing in this issue goes to capacity: both stated objects are working capital and debt repayment (RHP p.115). Products are stored in five leased godowns in Andhra Pradesh, Telangana, Odisha, Assam and Bihar, which cost ₹71.91 lakh in FY26 against ₹17.17 lakh in FY24 (RHP p.50).

14Market size and industry structure

As claimed: the industry chapter is the B2K Industry Report, "Assessment of Agrochemicals Industry in India" dated September 11, 2026, commissioned by the issuer (RHP p.191, RHP p.60). It puts the sales of the top eleven listed agrochemical companies together with Shivchem, about 70% of industry sales on its own estimate, at ₹66,408 million in FY2024, down 19.74% on FY2023, and the industry net profit margin at 6% to 7% (RHP p.185).

The part that is addressable: formulated crop-protection products sold to distributors in the eight states where the company is licensed for sale (RHP p.192).

What the company is today: ₹3,381.59 lakh of FY26 revenue, about 0.5% of the ₹66,408 million the commissioned report attributes to the top eleven companies and itself (our arithmetic, RHP p.83, RHP p.185). The report does not size the eight-state market the company actually sells into.

Structure, as the commissioned report describes it: competition from domestic and international makers, dependence on imported technicals, regulatory restriction on registrations, and demand that moves with the monsoon (RHP p.185, RHP p.46).

15Competitive position

Source: RHP p.138. What the company offers against them, on its own account, is a licence base of 176 products under the Insecticides Act and 82 fertilizers, a distributor network of 685 built in three years, and a single plant with an effluent treatment plant and a scrubber (RHP p.192, RHP p.207). Its higher return on capital sits on a much smaller capital base: net worth of ₹1,292.03 lakh against ₹3,134.76 lakh for Super Crop Safe and ₹8,628.94 lakh for Sikko Industries (RHP p.138). It does not make technicals; it formulates them, and the top supplier was 33.57% of FY26 purchases (RHP p.44).

16Peers the company named

Peers named in the offer document: Super Crop Safe Limited and Sikko Industries Limited (RHP p.133).

Source: RHP p.133; the peer prices are closing prices of August 31, 2026, on BSE for Super Crop Safe and NSE for Sikko Industries. The prospectus prints the industry P/E as a highest of 27.83, a lowest of 15.21 and an average of 21.52, worked out from those two companies alone (RHP p.132). The prospectus states that, given the nature and size of the business, the peers are not strictly comparable and are included for broad comparison (RHP p.133). Super Crop Safe is about 1.6 times this company's revenue and Sikko Industries about 1.9 times (our arithmetic, RHP p.133).

17Valuation at the issue price

At the upper band of ₹62, with the full 22,60,000 new shares added to the 52,72,873 shares outstanding (our arithmetic, RHP p.102):

Source: RHP p.132, RHP p.133, RHP p.83. At the lower band of ₹59 the market capitalisation is ₹4,444.40 lakh (our arithmetic, RHP p.102). Enterprise value on the shares after the issue, with March 2026 borrowings of ₹727.52 lakh and cash of ₹12.84 lakh, is ₹5,385.06 lakh, 9.0 times FY26 EBITDA of ₹598.04 lakh (our arithmetic, RHP p.82, RHP p.138). Adding the gross proceeds to March 2026 net worth gives a book value of about ₹2,693.23 lakh, or ₹35.75 a share, which the upper band is 1.7 times (our arithmetic, RHP p.82).

The two peers the prospectus names traded at 27.83 and 15.21 times earnings on August 31, 2026, a median of 21.52 times (RHP p.133). At the upper band the issue is priced at 14.4 times FY26 profit on the enlarged share count and 10.1 times FY26 earnings per share on the prospectus's own pre-issue basis.

18Risks, in plain words

Cash: operating cash flow was minus ₹434.34 lakh in FY24, minus ₹299.85 lakh in FY25 and plus ₹179.25 lakh in FY26 (RHP p.47) → growth has been funded by payables and borrowing rather than by the business → trade payable days went from 99 to 317 over the same period (RHP p.118).

Working capital: raw material inventory days rose from 89 to 259 and receivable days from 87 to 151 between FY24 and FY26 (RHP p.118) → ₹690.00 lakh of the issue, two thirds of the stated objects, goes into the same cycle → the company's own March 2027 estimate assumes those days fall to 107 and 104 (RHP p.117, RHP p.118).

Suppliers: the largest supplier was 33.57% of FY26 purchases and the top ten 71.29% (RHP p.44) → the company formulates rather than makes technicals, so a supply or price shock passes straight through → net material cost was 63.41% of total expenses in FY26 (RHP p.42).

Creditors: two creditors accounted for ₹1,285.66 lakh of the ₹1,986.86 lakh of trade payables at March 2026 (RHP p.363) → a tightening of their terms would have to be funded elsewhere → cash at that date was ₹12.84 lakh (RHP p.82).

Distribution: revenue runs through 685 distributors with no long-term agreements, and the company offers discounts and rebates to hold them (RHP p.43, RHP p.44) → the network is the business → distributors rose 780.95%, 178.92% and 32.75% in the three years, so most of them are new (RHP p.137).

Geography and weather: Andhra Pradesh and Assam were 54.80% of FY26 revenue and demand moves with the monsoon (RHP p.48, RHP p.46) → a poor season in either state hits the year → Odisha and Bihar, entered in FY26, were 8.95% (RHP p.48).

Promoter transactions: the company paid ₹237.98 lakh of capital advances to its two executive promoters for property, of which ₹135.56 lakh is still outstanding (RHP p.43) → company money sits with the promoters pending a transfer → up to ₹17.12 lakh could be forfeited if the company defaults (RHP p.43).

Regulation and records: the prospectus discloses delays and discrepancies in forms filed with the Registrar of Companies, including Form INC-20A filed in May 2022 for subscription money received in November 2021, and non-compliance with the Labour Welfare Fund Acts (RHP p.45, RHP p.54) → penalties may follow → no show-cause notice had been issued at the date of the prospectus (RHP p.46).

Lenders: the prospectus records the non-issuance of no-objection certificates from unsecured lenders for the proposed issue (RHP p.47) → unsecured loans can be recalled at any time (RHP p.49) → short-term borrowings were ₹447.61 lakh at March 2026 (RHP p.82).

Issue-specific: the market-maker reservation is 1,14,000 of the 22,60,000 shares, and not more than 1,08,000 shares are available to qualified institutional buyers (RHP p.102). An individual investor must apply for at least two lots of 2,000 shares, ₹2,48,000 at the upper band (our arithmetic, BSE issue page for SHIVCHEM).

19Litigation and regulatory matters

There are no criminal proceedings, statutory or regulatory actions or tax proceedings against the company, its promoters, directors or key managerial personnel (RHP p.360, RHP p.363). The one matter involving a promoter is the SARFAESI application in which Rohit Agarwal, with promoter group entity Rohit Oil Industries and Radhey Shyam Agarwal, challenges the classification of an account as a non-performing asset and a notice under Section 13(2) demanding about ₹70.91 lakh (RHP p.362). That amount is demanded by the bank and disputed by the applicants, and it is not a liability of the company.

20Related-party transactions

Source: RHP p.87, RHP p.88. Related-party dealings in FY26 other than loan movements come to ₹298.50 lakh, of which ₹237.98 lakh is the property advances (our arithmetic, RHP p.87, RHP p.88). Unsecured borrowing repaid to promoters and their firms was ₹409.67 lakh in FY26, and the unsecured loan balance owed to Rohit Agarwal and Sachin Agarwal fell from ₹196.01 lakh at March 2024 to ₹0.59 lakh at March 2026 (our arithmetic, RHP p.87, RHP p.88). The company pays rent to Sachin Agarwal and to Radhey Shyam Agarwal, ₹0.60 lakh each in FY26 (RHP p.88). Sales to related parties, ₹80.31 lakh in FY25, stopped in FY26 (RHP p.87).

21What the offer document does not say

Realisation per kilogramme or litre by product is not disclosed, so the revenue increase cannot be split into volume and price. The names of the two creditors who account for ₹1,285.66 lakh of trade payables are not given in the prospectus, which points to the company's website instead. The rupee size of the eight-state market the company sells into is not given in the commissioned report.

Distributor retention, and how much of the 685-strong network was active in FY26, is not disclosed. Why AWA Endeavor LLP, which took both placements, fell below 1% is not explained. The issue price, the issue expenses and the amount for general corporate purposes are left blank.

22Five questions for management

1. Why did raw material inventory days rise from 89 to 259 in two years, and what is the age profile of the ₹2,056.47 lakh of inventory at March 2026?
2. Which two creditors hold ₹1,285.66 lakh of the ₹1,986.86 lakh of trade payables, on what terms, and are any of them also suppliers of technicals?
3. What property is being purchased from Sachin Agarwal for the ₹135.56 lakh advance, on what valuation, and by when will the transfer complete?
4. How many of the 685 distributors placed an order in each quarter of FY26, and what share of the ₹1,693.56 lakh of receivables is owed by distributors added in FY25 and FY26?
5. Why did insecticide revenue fall from ₹1,615.48 lakh to ₹1,025.36 lakh in FY26 while herbicides nearly doubled?

1Sources and cited facts

This study was read from 1 document the company filed. The 111 figures it cites are listed under the document each came from, with the page and the sentence as printed.