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Sacheerome

* Sacheerome is coming out with an initial public offering (IPO) of 60,40,800 equity shares in a price band Rs 96-102 per equity share.

* The issue will open on June 9, 2025 and will close on June 11, 2025.

* The shares will be listed on SME Platform of NSE.

* The face value of the share is Rs 10 and is priced 9.60 times of its face value on the lower side and 10.20 times on the higher side.

* Book running lead manager to the issue is GYR Capital Advisors.

* Compliance Officer for the issue is Harpreet Kaur.

Profile of the company

Sacheerome is engaged in a creative house, designing & manufacturing fragrance and flavours. It was founded in the year 1992 by its visionary promoter Manoj Arora, who is a third-generation entrepreneur of a business family in Fragrance & Flavour industry and has been actively involved in this line of business form last 40 years. The company was initially only in the fragrance industry. In 2014, the company ventured into the flavours and has a separate unit, with a team of skilled flavorists, an application centre and a Research & Development centre.

The company’s products adhere to the global standards such as the International Fragrance Association (IFRA), European Commission (EU), Food Safety and Standards Authority of India (FSSAI), and Flavour Extract Manufacturers Association (FEMA as per the requirements of the customers). It is member of Chemexcil and Fragrances & Flavours Association of India (FAFAI). Additionally, it complies to ISO 9001:2015 ensuring top quality and reliability. 

The company’s manufacturing facility is equipped, with an annual production capacity of 7,60,000 Kg. It has a strong and dedicated R&D team of 45 specialist persons, at Y-4 Okhla Industrial Area, Phase-II, New Delhi and F-89-4-2 Okhla Industrial Area, Phase-1, New Delhi. Its highly trained team combines expertise from fragrance and flavor design specialists and marketing intelligence.

Proceed is being used for:

* Setting up a new manufacturing facility at Yeida, Gautam Buddha Nagar, UP

* General Corporate Purpose

Industry Overview

India’s fragrances market is anticipated to grow at a CAGR of 14.50% from 2024 to 2032, driven by factors such as rising disposable incomes, increasing consumer focus on personal grooming, and the proliferation of global beauty trends via social media. India has a rich history of olfactory culture, with the use of aromatherapy, incense, and ittar dating back to ancient times. The Indian market is experiencing a surge in demand for natural and organic fragrances as consumers seek healthier alternatives to synthetic chemicals. Additionally, the influence of Western fashion, e-commerce growth, and celebrity endorsements are contributing to the market’s expansion. Fragrances are now considered an essential part of daily grooming, particularly among the millennial population, which accounts for a significant portion of India’s consumer base.

The Indian flavours market is experiencing robust growth, driven primarily by the expanding food processing industry and increased demand for packaged, ready-to-eat foods and beverages. According to a report by IMARC Group, the market size reached Rs 4,287 crore in 2023 and is projected to grow at a CAGR of 7.1% from 2023 to 2032, reaching Rs 8,100 crore by 2032. The utilization of flavoring ingredients in various products - such as bakery items, confectioneries, ice creams, smoothies, and energy drinks - is significantly contributing to this growth. The rise of urbanization and Western food trends further boosts demand for these flavoring agents. Additionally, the popularity of processed and shelf-stable food products like noodles, soups, cake mixes, RTD tea and coffee, and juices - especially among millennials - is accelerating market expansion. 

The emergence of quick-service restaurants (QSRs) and the expanding café culture in India are also driving demand for innovative and diverse flavours. Moreover, government initiatives such as the 'aroma mission' of CSIR-CIMAP, the Aroma Park in Uttarakhand, and the Purple Revolution in Jammu & Kashmir aim to cultivate new aromatic ingredients and harness India’s rich aromatic heritage. These initiatives are set to revolutionize the industry, create rural employment opportunities, and promote sustainable practices. The global and Indian flavours and fragrances markets are experiencing robust growth, driven by innovation, rising consumer awareness, and an increasing focus on natural and sustainable products. The Indian market, in particular, is seeing rapid expansion due to changing consumer preferences, growing disposable incomes, and the influence of social media. This presents significant opportunities for businesses to tap into the growing demand for unique, high-quality flavours and fragrances, and to meet the evolving needs. 

Pros and strengths

Strong research and development skill: Together with knowledge from Fragrance & Flavours design specialists, marketing intelligence, and quality assurance, its highly experienced in-house team of trained perfumers and flavourists works to create distinctive notes at accords. With their extensive training and specialized knowledge, they are adept at comprehending the unique requirements of its clients.

Efficient sourcing of raw materials / global sourcing: Sacheerome’s extensive knowledge of ingredients and network to procure the right quality of raw materials at the most competitive rates give it a competitive edge in terms of effective and timely sourcing, which guarantees efficient manufacturing process and prompt product delivery, improving the customer experience overall. In the financial year 2023-24, it sourced major raw materials from Indian importers and manufacturers.

Efficient manufacturing facilities: The company’s manufacturing facility situated at F-89/4/2, Okhla Industrial Area, Phase I, New Delhi, is equipped with cutting-edge technology, and robotic finesse at formulating the most sophisticated aromas in single lot sizes ranging from 10gm to 10MT with great precision. The robotic production plant is imported from Europe. The company’s storage facilities are made of stainless steel 316, is temperature controlled and it use nitrogen-filled storage vessels to safeguard the delicate properties of ingredients and products. The company’s facilities represent a seamless integration of technology, stringent quality control measures, and robotic production, all aimed at delivering superior fragrance and flavour solutions tailored to the clients' needs.

Risks and concerns  

Maximum revenue comes from limited clients: A significant portion of the company’s revenues is dependent on a few key customers. The company’s top five customers accounted for 49.26%, 45.08%, and 45.90% of its revenue from operations for fiscal years 2025, 2024 and 2023 respectively. This reliance on a limited number of customers exposes it to risks, including, but not limited to, reductions, delays, or cancellations of orders from these key customers, the failure to negotiate favorable terms, or the potential loss of these customers. Any of these factors could have a material adverse effect on its business, financial condition, results of operations, cash flows, and future prospects.

Geographical constrain: The sale of the company’s products is significantly concentrated in state of Uttar Pradesh. The company garnered 29.94%, 36.61% and 36.93% of its total revenue from Uttar Pradesh in FY25, FY24 and FY23 respectively. Any significant social, political or economic disruption, or natural calamities or civil disruptions in this region, or changes in policies of the state or local governments or the government of India or adverse developments related to competition in Uttar Pradesh, may adversely affect its business, results of operations, financial condition and cash flows.

Increasing competition and industry consolidation: The fragrance and flavor industry is characterized by intense competition and a growing trend towards consolidation. Increasing competition and growing trend towards consolidation in the fragrance and flavour industry can result in declining prices and weaken its market share, which could adversely affect its business, financial condition and results of operations. Additionally, industry consolidation may result in larger, more resourceful competitors with enhanced operational efficiencies, and greater bargaining power with suppliers and customers. Such developments may weaken its competitive position, erode its market share, and impact its pricing strategy. If the company is unable to effectively differentiate its products, maintain cost efficiencies, or respond to competitive pressures, its revenues, profitability, and overall financial condition may be adversely affected.

Outlook

Sacheerome is a creative entity specializing in the designing and manufacturing fragrances and flavors. The company offers diverse products, including cosmetic fragrances, industrial fragrances, perfumes, food additives, and flavoring essences. The company has strong research and development skills with efficient quality control, assurance and regulatory. On the concern side, a significant portion of its revenues is dependent on a few key customers, with whom it does not have firm commitments. The loss of any one or more of these major customers could have a material adverse effect on its business, cash flows, results of operations, and financial condition. The sale of its products is concentrated in state of Uttar Pradesh. Any adverse developments affecting its customers’ operations in such region, could have an adverse impact on its business, financial condition, results of operations and cash flows.

The company is coming out with a maiden IPO of 60,40,800 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 96-102 per equity share. The aggregate size of the offer is around Rs 57.99 crore to Rs 61.62 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased from Rs 8,50,953 thousand in FY 2023-24 to Rs 10,73,359 thousand in FY 2024-25, marking a substantial growth of 26.37%, driven by significant increases in both export and domestic sales. Profit after tax for the fiscal year 2025 stood at Rs 1,59,821 thousand, compared to Rs 1,06,730 thousand in fiscal year 2024, an increase of 49.74%, significantly outpacing the revenue growth of 26.37% over FY 2024.

The company continues to seek to increase its market share and strengthen its position in the industry. It proposes to achieve this by setting up a modern infrastructure manufacturing facility comprising of Manufacturing, Research & Innovation Centre, Quality Centre, Application Centre, Consumer evaluation Centre, Administration and Perfumery training Centre and various other dedicated facilities for its fragrances & flavours at YEIDA, Gautam Buddha Nagar, Uttar Pradesh. Further, to continue offering cutting-edge products and solutions in order to fulfil its commitment to adding value for customers as well as maintaining their competitive edge in the fiercely competitive FMCG market, the company encourages close collaboration between its R&D and Sales & Marketing departments. By using its research and development capabilities, it develops new products based on customer requirements and market trends.