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Unisem Agritech

• Unisem Agritech is coming out with an initial public offering (IPO) of 33,00,000 shares in a price band of Rs 63-65 per equity share. 
• The issue will open on December 10, 2025 and will close on December 12, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 5 and is priced 12.60 times of its face value on the lower side and 13.00 times on the higher side.
• Book running lead manager to the issue is Getfive Advisors.
• Compliance Officer for the issue is Bobby Seth.

Profile of the company

The company is engaged in developing, processing, and selling diverse range of seeds for vegetables, flowers and field crops. By integrating conventional breeding techniques, it strives to develop hybrid vegetable, flower and field crop seeds which offers higher yields, improved product quality, and greater resistance to pests and diseases compared to naturally grown varieties. Its core operations focus on developing hybrid vegetable, flower and field crop seed varieties and processing them to ensure the consistent quality.

It continuously develops various type of hybrid breeder seeds and selects only the best qualitative traits from it which undergo additional processing and eliminating more seeds and provide only the superior quality seeds, which are known as foundation seeds. The foundation seeds consist of the parental materials essential for developing a hybrid. Following this, the foundation seeds then multiplied into commercial seeds, which are then offered in the market for agricultural production. It provides multiple seed variants for vegetable, flower and field crop, specifically designed to meet the requirements of different Agro-climatic conditions, including factors such as water availability, crop duration, and soil characteristics across various geographic regions.

To facilitate the production of commercial seeds, the company enters into seed grower production agreements with various vendors. Throughout this large-scale production cycle, its team conducts regular field visits to monitor crop growth and ensure the recommended standard practices are followed. Once harvested, the commercial seeds undergo a rigorous quality check. Only after passing this evaluation these seeds are then processed at its processing unit, which is equipped with technology and spans over 873.75 square meter. Finally, the processed commercial seeds are carefully packed and distributed for sale to various dealers situated at multiple states.

Proceed is being used for:

• Meeting the working capital requirement 
• Repaying Banking Facilities availed by the company
• General corporate purposes

Industry overview

India's seed industry plays a pivotal role in ensuring national food security and agricultural sustainability. High-quality seeds are essential for maximizing crop yields and farmer livelihoods. However, seed viability can be significantly impacted during storage and transportation. Traditional methods, while effective, have limitations. Seeds are the foundation of agriculture. Their quality directly influences germination rates, plant vigor, and ultimate crop yield. Deterioration during storage and transportation can significantly compromise these factors. Seed moisture content, temperature, and exposure to pests and diseases are critical factors impacting viability. Implementing advanced storage and transportation solutions is crucial to ensure seeds reach farmers in optimal condition. 

The Indian agricultural sector is predicted to increase to $24 billion by 2025. Indian food and grocery market is the world’s sixth largest, with retail contributing 70% of the sales. As per the First Advance Estimates for 2023-24 (Kharif only), total foodgrain production in the country is estimated at 148.5 million tonnes. Rabi crop area has from 709.09 lakh hectares in 2022-23 to 709.29 lakh hectares in 2022-23. In 2022-23, India's horticulture output is expected to have hit a record 351.92 million tonnes (MT), an increase of about 4.74 million tonnes (1.37%) as compared to the year 2021-22. The Agriculture and Allied industry sector witnessed some major developments, investments, and support from the Government in the recent past. Between April 2000-March 2024, FDI in agriculture services stood at $3.08 billion.

The agriculture sector in India is expected to generate better momentum in the next few years due to increased investment in agricultural infrastructure such as irrigation facilities, warehousing, and cold storage. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be self-sufficient in pulses in the coming few years due to the concerted effort of scientists to get early maturing varieties of pulses and the increase in minimum support price.

Pros and strengths

Wide Range of Seeds and its Variants: The company offers an extensive range of seeds like 193 vegetables seeds, 10 flower seeds, 8 field crop seeds variants. Its diverse product portfolio enables customers to source all their seed-related needs from the company, which not only strengthens its relationships with existing customers but also helps it attracts new ones. Further, it has necessary resources, experience, and network that can be used and leveraged to produce even wider range of products at a later stage.

Integrated Seed processing unit with warehouse facility in one premise: Its seeds processing unit is equipped with seed sorting, grading and packing machines, its seeds processing facility includes warehousing to store seeds. The integrated seeds processing unit with required storage infrastructure to store the seeds help the company to meet the demand as per the sowing season. Its plant is also strategically located and have access to logistic to transport its products.

Diversified locations: Its offices, located across various regions of Madhya Pradesh, Uttar Pradesh, Telangana, Odisha, Andhra Pradesh and Karnataka help it in enhancing its market reach and operational resilience. This geographical spread allows it to tap into local markets, adapt to regional demands, and mitigate risks associated with any single location. It fosters closer customer relationships and ensures faster delivery of services and products. This not only enhances the company's stability by spreading market risks but also enriches its expertise across different market dynamics and consumer behaviours.

Risks and concerns

Highly dependent on the sale of seeds: A significant portion of its revenue is derived from the sale of vegetable seeds, making its business highly dependent on their demand and market performance. Any decline in demand for hybrid seeds due to factors such as climatic changes, government policies, pricing pressure, availability of alternative seeds, competition from domestic and international players, or changes in consumer preferences could materially and adversely impact its revenue and profitability. Further, the quality, yield performance, and adaptability of vegetable seeds play a crucial role in determining market acceptance. If its hybrid seeds fail to meet industry standards or farmers’ expectations in terms of yield, resistance to pests and diseases, or adaptability to varying climatic conditions, it may result in loss of customer confidence and negatively impact its sales.

Dependence upon third party transportation services: It does not have an in-house transportation facility and it relies on third party transportation and other logistic facilities at every stage of its business activity including for procurement of products from its suppliers and for transportation of its finished products to its customers. For this purpose, it hires services of transportation companies. However, it has not entered into any definitive agreements with any third-party transport service providers and engage them on a need basis. Additionally, availability of transportation solutions in the markets it operates in is typically fragmented. The cost of its goods carried by such third-party transporters is typically much higher than the consideration paid for transportation, due to which it may be difficult for it to recover compensation for damaged, delayed or lost goods.

High working capital requirements: Its business requires significant amount of working capital and major portion of its working capital is utilized towards accounts receivable and inventories. Its accounts receivable collection cycle is fairly long as a result of the nature of its business and operations. This makes its business more susceptible to market downturns and client credit risk. Its growing scale and expansion, if any, may result in increase in the quantum of current assets. Seed production requires various raw materials including foundation seeds as well as other key inputs such as pesticides, fertilisers and electricity. Its inability to maintain an optimal level of working capital required for its business may impact its operations adversely.

Outlook

Unisem Agritech is engaged in the manufacture and sale of vegetable and fruit seeds. It owns land and also leases land for sowing and growing vegetable and fruit seeds. The company’s manufacturing operations are carried out in Ranebennur, Karnataka. Additionally, the company has expanded its presence with offices in various states, including Telangana, Madhya Pradesh, Odisha, Bihar, Chhattisgarh and Uttar Pradesh, as well as other locations within Karnataka. Apart from this, the company has over 800 distributors across India. On the concern side, it is exposed to payment delays and/or defaults by its major customers or dealer and its financial position and financial performance are dependent on the creditworthiness of its customers. There is no guarantee that all or any of its customers or dealers will honour their outstanding amounts in time and whether they will be able to fulfil their obligations, due to any financial difficulties, cash flow difficulties, deterioration in their business performance, or a downturn in the global economy.

The company is coming out with a maiden IPO of 33,00,000 equity shares of Rs 5 each. The issue has been offered in a price band of Rs 63-65 per equity share. The aggregate size of the offer is around Rs 20.79 crore to Rs 21.45 crore based on lower and upper price band respectively. On performance front, the Revenue of operations of the company has increased from Rs 6,113.88 lakh in FY 2024 to Rs 6,907.75 lakh in FY 2025. The increase in revenue of the company shows a growth of 12.98%. Moreover, the profit after tax of the company has increased from Rs 215.32 lakh, marking 3.52% of the total income, in FY 2024 and Rs 427.41 lakh, leading to 6.19% of the total income, in FY 2025.

Going forward, it will continue to focus on further increasing its operations and improving operational effectiveness at its production facilities. Higher operational effectiveness results in greater production volumes and higher sales which allows it to reduce its fixed cost per unit and thereby, increasing its profit margins. It wishes to constantly pass such benefit to its customers and increase its efficiency further. It also wishes to target economies of scale to gain increased negotiating power on procurement.