Vishwas Agri Seeds Limited IPO Message Board (Page 7)

Vishwas Agri Seeds Limited is doing business in market since 2013, even at the time of COVID business was sustained. Looking to profit and earning growth, this company seems good to apply. This is my personal view company launching IPO slightly higher valuation so might be listing gain will be less, however company business is doing good and with the IPO generated case will be plan to grow business so in future it could be a good stock.

I am not registered any where, so this is my view only, please do not use as recommendation.

Negative listing nahi hogi.

​@Tejas Pandya 

How is this Company ? I have heard that you are from Rajkot and therefore I am asking you. Any ideas or views ?

Sorry no idea..

company is from Ahmedabad

promoters living in rajkot-jetpur

Rajkot based co .

Like bombay super .

Game hoga

LM + MM = silent performer combination (Sadhav, Megson, Sealmatic)
Company is in business of getting seeds manufactured on contract basis from farmers and then selling through its distribution business in Gujarat, Rajasthan and Madhya Pradesh.
Company has 77 employees of which 50 are unskilled labor and workmen and 27 are staff. Of these 27, 12 are sales people
Company has 2 group companies, Vraj Agri Seeds and Krushikar Farmers Producers Co which are in the same line of business. For 22-23, its purchases from group companies was 15% and sales to group companies was 7%. Company has also given guarantee for Rs 6.2 cr loan taken by Vraj Agri Seeds. Vraj Agri seeds appears to be a multi brand distributor for seeds and hence there appears to be risk that promoters may prioritise margins of Vraj Agri Seeds over Vishwas Agri Seeds.
Immaterial litigation involving company or its directors.
Seasonal business with sales in 1st half significantly higher than 2nd half and highly dependent on monsoon.
Top 5 customers make up 22.6% of revenue for H1fY24. Top 5 suppliers provide around 14% of total purchases.
Capacity utilisation for H1FY24 was 60% leaving enough scope to meet demand increase.
Decent cash flow. PBT for 3 ½ years ending Sep-23 was Rs 18.11 cr while CFOB4T for the same period was Rs 15.12 cr.
Issue is underwritten 95% by ISK Advisors and 5% by Sunflower Broking.
Issue expenses @ 7.4% of IPO size seem to be reasonable.
Objects of the issue is an interesting read. The issue proceeds will be utilized for furnishing corporate office, setting up testing lab, installing rooftop solar plant, equipment purchase, working capital needs and general corporate purpose.
Rs 4 cr will be used for furnishing corporate office, roughly 8500 sq ft, which would have at the most 15-20 people (assuming sales persons will be on field). This works out to Rs 20 lacs per person.
A few examples,
company will be spending Rs 32.5 lacs for revolving chairs. Assuming Rs 10,000/- per chair, that will be 325 chairs. Are the 20 employees going to play musical chairs with 325 chairs ?
Company will buy 6 units of Blue Star 11 ton AC. 1 unit of 11 ton ac can cool approx. 500 sq ft area, so 11 units will cool 5500 office area.
Is that needed for 20 persons staff?
Rs 18.5 lacs will be spent on purchasing art work and murals to decorate the office. Investors need to trust whether these will remain in office or some other residences ?
Based on working capital projections, company is targeting revenue of Rs 78 cr for 23-24 and Rs 94 cr for 24-25.
Assuming annualized EPS of Rs 8 for 23-24, PE works out to 10, large Kaveri Seeds trades at 12.3.
Material cost as % of sales is 78% for H1FY24, for kaveri seeds it is 54%, for
Although company has 27 full time staff, it has not deposited PF for any employee in 23-24 or earlier period.
Company has 151 different types of seeds of crops and vegetables. Ground nut and Cumin seeds sales make up 83% of the portfolio and this has been steadily increasing YoY. Product diversification for de-risking and its results in future will have to be monitored.
Of the 783 odd distributors, 74% are in Gujarat, 19% in Madhya Pradesh and remaining in Rajasthan.
The 3 executive directors have disclosed their residence in Rajkot and Jetpur while the corporate office, warehouse and facility is near Ahmedabad, around 200 KMS away.
Out of Rs 33.81 cr receivables as on 30-Sep-23, Rs 24 lacs are due for more than 1 year while Rs 33 lacs are due for 6 months to 1 year. Receivables seem under control.
Short term loans and advances include advance of Rs 6.87 cr to others.
Inventories of Rs 16.3 cr consists of RM and FG inventories. Seems company needs to consistently maintain high inventory due to nature of business & seasonality.
Staff cost is Rs 3.2 cr for 22-23, of which Rs 40 lacs is paid to 3 executive directors and Rs 30 lacs for labour. So for the remaining 24 staff, the cost is Rs 2.4 cr which works out to Rs 10 lacs per annum. And yet none of the employees qualifies for PF contribution. Strange?
Other expenses were Rs 6.6 cr for 22-23 and Rs 3.1 cr for H1FY24. Packing material consumption was Rs 1.3 cr for 22-23 and Rs 19 lacs for H1FY24. Reasons for drop not known.
Freight, job work expenses and other manufacturing expenses were Rs 1.28 cr for 22-23 and Rs 1.36 cr for H1FY24.
Rate difference credit note, presumably given to customers, was Rs 2.76 cr for 22-23 and Rs 1 cr for H1FY24. Reasons for drop not known.
Promoters have lent Rs 1 cr to company for working capital which is interest free and repayable on demand.
Borrowing are mostly from HDFC bank and while rate of interest is not disclosed, it appears to be around 8%.

Sharing some findings from the Prospectus

Sorting process which is the prime process in seeds process unit. Previously, the company relied on job work for sorting processes, looks like company was dependent on outsourcing for some of the seed processing in there Rajkot unit till July 2023. Recently the company has moved to its own seed processing unit in Ahmedabad. Hence, being independent of job work.

From Restated Financial Statement it seems that company has made significant amount of capital expenditure. Approx. 15 crore cumulatively in preceding 2 years from F.Y 22-23 to Sep 23 for setting up a new Seed Processing unit at Ahmedabad. Company has shifted from Rented unit from Rajkot to its own unit at Ahmedabad in July, 2023. Seed processing unit, equipped with all machinery required is spread across 5 acres that includes factory shed, cold storage, warehouse and machinery of seed processing unit as mentioned in the Prospectus.

The storing capacity of warehousing is 4200 MT (Metric ton) capacity of stock and cold storage facility is 3000 MT of stock. This investment in my view will reduce operational cost, consequently bolstering product margins.

Further on reading Prospectus it looks like the company's sales were primarily concentrated within the state of Gujarat. Company in it's object of the issue requires additional working capital and has mentioned appointment of new CNF agent and rented warehouse in Rajasthan and Madhya Pradesh. This would help company expand its reach in other parts of India and use it's current installed capacity of processing seeds. As part of the plan, presently company has 62 & 145 Distributors respectively in the state of Rajasthan and Madhya Pradesh.

As per the other object of the issue, the company wants to raise funds from IPO towards setting up Seed Testing laboratory & Greenhouse which will help in testing quality of seeds and work on developing different variants of seeds. With in-house Seed Testing laboratory and green house farm within seed processing unit, it will help meet customer demand, improve quality of products and develop new variants of products.

Further company wish to spend Rs. 4cr for Capital expenditure to furnish the corporate office building, going by the detailed line items mentioned, it looks strange, I consulted a contractor friend to ask him his opinion of the cost of furnishing 12,000 Sq.ft. Office. He said Rs. 4000 Sq.ft for furnishing a corporate office building is a reasonable standard as per current cost. I wish there was more clarity/ detailing on cost of furniture in the prospectus.

Downside of this IPO is that the business is seasonal in nature and the industry has a lot of unorganized players which makes it a competitive market. Also, I feel that company should have considered repayment of loan as one of the object of the issue. The business is also dependent on government setting MSPs for some products which could affect profitability.

Image of the seed processing unit near Ahmedabad of Viashwas Agri Seeds limited from the google maps image.

Request other experts to give there valuable opinion.

​@Organic Backward integration, research and development, and seasonality : all this makes it a long term option only and if the results of non seasonal part of the year come in good, there is a slight positive aspect to it. Like most SMEs, either the financials have inherent surprises or the objects of issue, in this case the furniture and employee benefits cater to that.

And without QIB, even if marginal gains are visible via Grey Market, selling pressure all in all will lead this to form a new base post listing, which can be the opportunity to cash in on this, if someone is interested in this sector.

Otherwise as well, seasonal counters should generally be put hands upon when the showcase not so good results so as to catch them at the right point of turn around.

Ye Vishwas Tod skta hai
Most of Seed Cos generate highest profits in Q1
Half Yearly Results are misleading

વાવશે વિશ્વાસ..
લણશે વિશ્વાસઘાત?

​@Tejas Pandya .. Bhai फिर काहे लिखे हो कि आखिर में काटा विश्वासघात ।।
तभी तो हम कन्फ्यूज हो गया 😍

​@diwan kapoor जी मेरे साथ ना सही लेकिन मेरे साथी इन्वेस्टरों के साथ..

why they stopped giving debt to equity ratio in table?

I have requested @Admin @ Chittorgarh.com  several times to put some sort of control on new members comments.. I strongly believe that new joiner should not be allowed to post atleast for initial one week.. He should have view access only for initial one week..
New Joining for purely a promotion should be discourage..
This is my personal view...
So No Argument... No bahasbazi.. Please 🙏

​@Shri Bappa HAPPY HOLI... BANDHU 🥀🥀

​@diwan kapoor  Happy Holi to all CG member 💐💐

Dear admin new member 1 month Tak comment nahi kar sakte he asa kuch to system Karo

​@Investor agribusiness With all due respect, please do not use abusive language, it is one of the reasons the Admin can ban you on this forum..🙏🙏

Please put forward youur point of view in a structured, pointwise manner..

If you had respect, you would not have used this kind of language. I repeat this gets you banned, eventually..

And if you had been warching this forum for even 10 days, you would have got your answer.

I am not getting into any debate with you or others about this..

Feel free to use any kind of language..

I am a investor since 10+ years and from 2 years I am stop investing in SME ipo but my instinct get that this company is from land of agriculture and the ipo is looking very good in financial way it's look like a runing bull coz revenue assets profit all terms are increase from year to year at the end our country is known as agriculture hub for global so according to my knowledge this company give a bestest return to investor
So i am investing in this company with very high investment

so mr. lucky how many lots are you applying.

​@Scube 😊😀👍🏻