Madhusudan Masala IPO (NSE SME) Overview

Madhusudan Masala IPO envisages to raise Rs 23.80 crores entirely as a fresh issue of 34 lakh shares. Madhusudan Masala IPO will list on NSE SME platform Madhusudan Masala Limited is engaged in manufacturing and processing more than 32 types of Spices under the brand names “DOUBLE HATHI” and “MAHARAJA”.

IPO opensSep 18, 2023
IPO ClosesSep 21, 2023
IPO Size (Rs.)₹23.80 Cr
IPO Size (shares)3,400,000 shares
Breakuponly Fresh issue
Face Value:₹ 10
IPO Price in Rs :₹66 to ₹70 per share
Minimum Lot2000 Shares
Listing AtNSE SME
Anchor & QIB Quota50%
NII Quota15%
Retail Quota35%
 Lead ManagerHem Securities
RegistrarKfin Technologies
Market makerHem Finlease

About Madhusudan Masala Limited:

  • Madhusudan Masala is engaged in the business of manufacturing and processing of more than 32 types of Spices under the brand names of “DOUBLE HATHI” and “MAHARAJA”.
  • It also sell products like: Whole Spices, Tea and Other Grocery Products like: Rajgira flour, Papad, Soya Products, Asafoetida (Hing), Achar masala (Ready to make pickle powder), Sanchar (Black salt powder), Sindhalu (Rock salt powder), Katlu powder (Food supplement), Kasuri Methi (Dry fenugreek) etc under the brand name of “DOUBLE HATHI”
  • Additionally it also generates revenue from trading of whole spices and food grains through unbranded sales.
  • Currently, it is supplying majority of products mainly in the saurashtra region of Gujarat and hence more than 85% of our revenue for the last 3 financial year is generated from this region only.
  • As on March 31, 2023 Madhusudan Masala Limited had more than 2100 wholesalers spread majorly in Gujarat, Maharashtra and Rajasthan.
  • Mr. Dayalji Vanravan Kotecha, Mr. Vijaykumar Vanravan Kotecha, Mr. Rishit Dayalaji Kotecha, and Mr. Hiren Vijaykumar Kotecha are promoters of the company.

Financials: Madhusudan Masala Limited

Particulars / Rs LacsFYE23FYE22FYE21
Total Income12,750.576,651.816,875.18
Profit Before Tax773.2397.0361.75
Profit after tax575.8981.2944.98
Equity Share Capital50011,094.09
Net worth1,099.1031.071,094.09
Earnings per Share6.9415.418.53
Net Asset Value13.245.89207.42
Total Borrowings4,217.202,819.53966.4
Post issue Share Capital1,290
IPO price70.0
EPS Fy234.5
PE Fy2315.7
Market cap in Lacs9,030.0
Market Cap/sales0.7


Madhusudan Masala IPO: Salient Points

  • Post the IPO, Promoters holding will come down from 100% to 73.64%.
  •  The industry is highly fragmented as there is competition from various organized and unorganized players.
  • Organized players like Gandhi Spices Private Limited (Hathi Masala), Adani Food Products Private Limited, Ramdev Food Private Limited, MDH Masala Private Limited, Baadshah Masala Private Limited, Everest Masala Private Limited and listed company NHC Food Limited.
  • For Fiscal 2023, 2022 and 2021 the raw material consumption constitutes 94.80%, 96.56% and 88.63% of its revenue from operations.
  • top 10 customers accounted, for 31.68%, 26.07% and 23.78% of its revenue from operations for the Fiscals 2023, 2022 and 2021 respectively.
  • Its financial performance is significantly dependent on the sale of chilli and chilli powder. For the Fiscals 2023, 2022 and 2021 the revenue from sales of chilli and chilli powder represented 34.01%, 41.79% and 53.76% of the revenue from operations respectively. This has come down a bit.
  • Currently, Madhusudan Masala Limited is supplying majority of the products mainly in the saurashtra region of Gujarat and hence more than 85% of its revenue for the last 3 financial year is generated from this region only.
  • During the Fiscal 2023, 2022 and 2021 its overall capacity utilization for manufacturing chilli powder were 33.43%, 29.51% and 35.61% respectively, for manufacturing Turmeric Powder were 19.30%, 18.31% and 19.10% respectively and for manufacturing Coriander Powder/Blend Spices/ Coriander Cumin Powder cumulatively were 19.54%, 19.16% and 31.14% respectively.
  • Company has been sanctioned credit facilities by Bank of Baroda.
  • Key Performance Indicators
Key Financial PerformanceFY 2022-23FY 2021-22FY 2020-21
Revenue from operations12,721.606,540.816,868.03
EBITDA Margin8.66%3.28%4.03%
PAT Margin4.53%1.24%0.65%
  • Company is a recognized brand name with heritage and a legacy of over four decades.
  • Products bifurcation is as follows:
  SalesProduct Category2020-212021-222022-23
  Amt. in lakhs% of Total  Amt. in lakhs% of Total  Amt. in lakhs% of Total
      Own Brand SalesBlended Spices237.34        4820.71        70.20%160.18        4222.03        64.55%94.69        6003.81        47.18%
Ground Spices2266.022170.483143.63
Other Grocery Products  121.60  149.01  166.29
Whole Spices1958.451616.892523.15
  Other SalesWhole Spices1243.29  2046.61  29.80%627.03  2318.78  35.45%3790.99  6720.58  52.82%
Food Grains803.321691.752929.59
 Grand Total6867.326867.32100.00%6540.816540.81100.00%12724.3912724.39100.00%
  • It has relationships developed a network of more than 2100 wholesalers and more than 3700 retailers as on March 31, 2023.
  • Madhusudan Masala IPO is coming at a PE ratio of 15.7x(fy23 earnings). revenues and profits has increased many times in Fy23.
  • Its listed peer NHC Foods Ltd is trading at 29x PE.
  • Another company, the recently listed Srivari Spices gave good listing gains.
  • I intend to apply in Madhusudan Masala Limited subject to availability of funds
  • GMP as reported on social media has been around Rs. 50 and has slowly moved upwards.
  • Hem secuities is the Lead Manager to the issue. The IPOs lead managed by them have given a good return to the investors. These include names like Kahan Packaging Limited, Asarfi Hospital Limited, Kaka Industries, Green Chef, Vasa Denticity, Chaman Mettalics, Hemant Surgicals, Labelkraft, Concord Control Systems Limited, Earthstahl & Alloys Limited, Silicon Rental Solutions Limited, Krishna Defence and Allied Industries, Prevest Denpro Limited etc.
  • SME IPO are quite illiquid and volatile and exit options sometimes is delayed.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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