Vedant Poly Fabs raises US$5.9M ₹56.68 in SME IPO to expand flexible packaging

INDIA – Vedant Poly Fabs Limited, a Barasat-based manufacturer of flexible packaging materials, has raised approximately ₹56.68 crore (US$5.98 million) through its initial public offering on the NSE Emerge platform, pricing shares at ₹88 to ₹94 (US$0.94 to US$1) each.

The offer comprises a fresh issue of up to 54,26,400 equity shares and an offer for sale of up to 6,03,600 shares by promoter Sethsawaria Poly Fab LLP. 

The company will not receive proceeds from the offer for sale. 

The issue represents about 29.9% of post-issue paid-up capital, with allocation of not more than 50% to qualified institutional buyers, at least 15% to non-institutional investors and at least 35% to retail investors. 

A reserved portion of up to 3,04,800 shares is earmarked for market maker Giriraj Stock Broking.

Proceeds Target Capacity Expansion and Debt Reduction

From the fresh issue, the company plans to allocate ₹24.61 crore (US$2.6 million) to incremental working capital, ₹8 crore (US$843,700) to prepay or repay borrowings, and ₹6.51 crore (US$686,600) to plant and machinery at its existing facility. 

The company’s installed capacity was 88.5 lakh kilograms in FY26 and 1.10 crore kilograms for the June 2026 period, with utilisation at about 71.64% in FY26. 

Planned new machinery is estimated to take capacity to 1.32 crore kilograms a year.

Revenue Growth and Margin Expansion Mark Financials

FY26 revenue stood at ₹115.14 crore (US$12.1 million), registering 42.11% year-on-year growth compared with FY25, while profit after tax reached ₹10.96 crore (US$1.16 million), reflecting approximately 140% growth. 

Revenue grew about 64% in FY25 and about 42% in FY26, a roughly 52% compound annual rate over two years. 

Operating EBITDA margin widened from 2.60% in FY24 to 16.50% in FY26, with return on equity at 38.03% and return on capital employed at 30.65%.

Concentration Risks Require Investor Scrutiny

The red herring prospectus flags several risks, including customer concentration, with the top ten customers accounting for 69.64% of sales in FY26 and 79.33% in the April-June 2026 period. Related-party transactions represented 41% of revenue in FY26. 

The company generally receives orders verbally without formal purchase orders or long-term contracts. 

The business produces multilayer films, shrink films, barrier films, printed laminates and milk and oil pouches for food, beverage and dairy companies, operating a business-to-business model from a single facility in West Bengal.

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