Swasth Foodtech's BSE SME Listing: IPO Enthusiasm Meets Market Caution

Swasth Foodtech India Limited debuted its stock market on Friday, February 28, 2025. Despite strong investor interest during the subscription period, the stock had a weak listing on the BSE SME exchange. The firm, which was incorporated in 2021, deals in rice bran oil processing and manufacturing by-products such as fatty acids, gums, and wax. It has a Purba Burdwan, West Bengal plant strategically positioned for easy access to crude rice bran oil suppliers.

Swasth Foodtech Listing Details

On the stock exchange, the listing was a mismatch between IPO subscription enthusiasm and post-listing sentiment:

• Listing Price and Time: The Swasth Foodtech stocks opened at about ₹94 equity on BSE SME, similar to the issue price. The flat opening did come as a surprise following high subscription numbers. 
• Issue Price Background: The IPO price was at ₹94 per share. Demand was strong; however, the reception in the market indicated investor apprehension about valuation. 
• Price Movement: Until about 11 AM IST, the stock saw afternoon volatility of ₹98.50 to ₹92.00, indicating uncertainty amongst investors. 

First-Day Trading Performance of Swasth Foodtech

Despite strong early interest, trading activity indicated caution among market participants:

• Volume and Value: In the first half of trading, the stock traded about 8.67 lakh shares, with a turnover of ₹ 8.16 crore. About 97% of the traded quantity was for delivery. 
• Demand Dynamics: With selling pressure on the stock, an additional 1,55,200 shares were sold on sell orders, compared to buy orders of 32,700 shares, indicating a level of cautious profit-booking.

Market Sentiment and Analysis

• Market Reaction: The stock could not gain momentum on the upside despite good subscription and post-listing.
• Subscription Rate: Swasth Foodtech has registered a total subscription of 7.83 times, which indicates good interest.
• Category-wise Response:
• NII (Non-Institutional Investors): 2.53 times subscription
• Retail Investors: 13.12 times subscription

Growth Drivers and Challenges 

Growth Drivers

• High demand for heart-healthy rice bran oil: More people prefer rice bran oil for its heart benefits.
• Strong B2B partnerships: Ties with big oil manufacturers ensure steady sales.
• Strategic factory location: Being in West Bengal ensures easy raw material access and lower transport costs.
• Zero-waste production: By-products are reused, reducing waste and increasing profits.
• Experienced leadership: A skilled team ensures smooth operations and growth.
• Growing awareness of health benefits: Consumers are becoming more conscious of rice bran oil's health benefits, enhancing demand.
   

Challenges:

• Tough competition with minimal profits: Numerous players make prices competitive.
• Raw material supply risks: Seasonal fluctuations impact availability.
• Increasing costs: Increased input costs lower margins.
• Expansion is costly: Expansion into new markets requires large investments.
• B2B reliance constrains brand extension: Reduced direct consumer interaction influences price power.
• Consumer preference for recognized brands: Market penetration becomes more difficult when competing with well-established edible oil brands.

Utilisation of IPO Proceeds 

• The company raised ₹14.92 crore through the IPO, which will be allocated as follows:
• ₹7 crore for setting up a packaging unit.
• ₹5 crore for working capital requirements.
• ₹2.92 crore for general corporate purposes.

Financial Performance of HP Telecom India

Swasth Foodtech has demonstrated steady financial growth in recent years:

• Revenue for FY2024: ₹134.32 crore
• H1 FY2025 (April-September 2024):
• Revenue: ₹88.63 crore
• Profit After Tax (PAT): ₹1.83 crore
• Net Worth: ₹8.07 crore as of September 2024
• Total Borrowings: ₹23.60 crore
• Total Assets: ₹36.91 crore as of September 2024
• ROE: 30.97% 
• ROCE: 13.48% 
• Debt/Equity Ratio: 3.75 
• PAT Margin: 1.44%

As Swasth Foodtech moves forward as a listed company, its growth and profitability will be 
scrutinized by investors who will probably watch its expansion into more markets. The IPO demand was good, but the movements concerning price are worrying.

Long-term vitality will be built upon solid financial stabilization, best cost management, and brand building. Analysts will monitor packaging and supply chain improvements.

While day one saw selling pressure, the future seems bright. There is a growing demand for healthy cooking oils, and the company adopts innovation and sustainability as its selling strategy. Investors will, therefore, watch how it navigates challenges and opportunities in the growing Indian food processing sector.
Success will depend on market expansion, cost control, and product quality, ensuring investor trust and long-term growth.