Amir Chand Jagdish Kumar
IPO Size: Rs. 440 cr, Entirely Fresh Issue
- for funding working capital needs of Rs. 400 cr
Price band: Rs. 201-212 per share
M cap: Rs. 2,195 cr, implying 20% dilution
IPO Date: Tue 24th Mar to Fri 27th Mar 2026, Listing Thu 2nd April 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Haryana-based Basmati Rice Processor
Amir Chand Jagdish Kumar is a B2B rice processor, with top 10 customers accounting for half of Rs. 2,000 cr revenue. Export revenue has been on a decline, now accounting for only 32% of revenue, as against 69% of revenue in FY23. While exports are to 38 countries, half are to Middle East, which may be adversely impacted due to ongoing Iran war.
Weak Fundamentals
Rice realisation has been stagnant since 3.5 years, at Rs. 75-80 per kg, implying all growth to be volume-linked, although processing capacity is only 50% utilized currently. Also quality concerns have increased of late, with H1FY26 alone reporting 5 instances of replacement from customers such as Swiggy, Walmart, GMR Hospitality, Metro – impacting future growth credibility.
Gross Margins Stable, but Net Margin Expand before IPO
FY25 revenue stood at Rs. 2,002 cr, with 15% gross margin and PAT of Rs. 61 cr, implying 3% net margin. While company’s gross margin has been stable between 15-16%, net margin has shown jump in the run-up to IPO – from 1.4% in FY22 and FY23, to 2% in FY24, 3% in FY25 and finally to 4.8% in H1FY26, However, H1FY26 margin will reduce for full year due to the business seasonality.
H1FY26 revenue was at Rs. 1,021 cr, with PAT of Rs. 49 cr and an EPS of Rs. 5.9, as against FY25 EPS of Rs. 7.5.
Huge Debt to Continue
Business is working capital intensive, due to procurement of rice during harvest season between Sep to Feb, which is debt-funded to the extent of almost 75%. Company’s debt and interest expenses are quite large, at Rs. 739 cr and Rs. 79 cr annually. This is quite large, with debt equity ratio of 1.7:1 (net worth of Rs. 441 cr) and annual interest cost being more than Rs. 61 cr PAT of FY25.
Also, interest cost increased to Rs. 43 cr in H1FY26. From the fresh issue proceeds, company will not repay any debt, instead fund working capital needs. Hence, interest outgo is unlikely to reduce.
Hugely Expensive Pricing
M cap of Rs. 2,200 cr and enterprise value of nearly Rs. 2,960 cr implies a PE multiple of over 23x, based on FY27E PAT of Rs.95 cr. This is expensive for B2B rice processor, with low single digit margin. RoE at 18% is high now, but post IPO, it will shrink to 9-10%, as equity expands. Even larger peers with stronger margins are trading much lower.
LT Foods with Rs. 10,000 cr topline, 6% net margin is trading at 18x PE while KRBL with Rs. 6,000 cr topline and 10% PAT margin is ruling at 10x PE. Smaller peer Chamanlal Setia with Rs. 1,400 cr topline clocks 10% margin and still trading at 10x PE. Thus, share is not worth even half the IPO price and IPO seems to be undertaken merely to complete before March timeline.
