Sheel Biotech 

• Sheel Biotech is coming out with an initial public offering (IPO) of 54,00,000 equity shares in a price band of Rs 59-63 per equity share.  
• The issue will open on September 30, 2025 and will close on October 3, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 5.90 times of its face value on the lower side and 6.30 times on the higher side.
• Book running lead manager to the issue is Narnolia Financial Services.
• Compliance Officer for the issue is Anupam Pandey.

Profile of the company

The company is engaged in the business of growing, developing, processing, and supplying a wide range of plants for field crops, fruits, vegetables, and ornamental plants through tissue culture and organic farming. It manufactures and maintains greenhouses, offer services to farmers and provide training through Farmer Producer Organizations (FPOs). Additionally, it delivers green landscaping services to both government and private sectors. It is an ISO 9001:2015, ISO 14001:2015 & ISO 45001:2018 certified company and is managed by industry experts and professionals with knowledge in the field of Biotechnology, Agriculture, Floriculture, Horticulture, Tissue Culture and Green Houses. The company is based in Delhi and has presence across India. 

Proceed is being used for:

• Meeting out the Capital Expenditure requirements of the company
• Meeting out the expenses for Working capital requirement for the company
• Meeting out the expenses for General Corporate Purpose

Industry Overview

The Indian Plant Tissue Culture (PTC) industry has exhibited rapid expansion since its commercial inception in 1987, when N.V. Thomas & Co. in Kerala pioneered large-scale tissue culture production of cardamom plants. PTC technology, a highly successful biotechnology in horticultural plant propagation, continues to offer significant outsourcing opportunities for PTC companies primarily based in Europe and the US. Due to the labor-intensive nature of PTC and the substantial role labor costs play in total production expenditures, many global firms prefer outsourcing their production activities to countries like India, where technical expertise is readily available alongside abundant, cost-efficient labor and low logistics costs. Currently, the global market for tissue cultured plants and related products is valued at approximately $15 billion, supported by over 248 commercial micropropagation companies in Western Europe and around 250 laboratories in the United States, with growing numbers in Asia and Eastern Europe. 

The availability of skilled, affordable manpower in India presents attractive prospects for international PTC companies from countries such as Israel, the USA, and the UK to establish their production units here. The synergy of quality technical support, inexpensive labor, and favorable transportation logistics continues to fuel the trend of outsourcing, making India a key hub in this growing global value chain.  Initially, Indian PTC industry units predominantly exported exotic and ornamental plantlets primarily to European markets. Presently, however, only a select number of units focus on plantlet exports, while the majority cater to the domestic market by supplying tissue cultured planting materials for fruit crops, ornamentals, and plantation sectors. Tissue culture propagation holds significant commercial promise, particularly for ornamentals, vegetables, and high-value fruit plants. The Indian government's supportive policies have been instrumental in this growth. The Ministry of Science and Technology has approved over 150 projects related to plant tissue culture across approximately 80 universities and research institutes for R&D and field demonstrations. Policy support from ministries of Commerce, Industries, and Agriculture has encouraged entrepreneurial participation, resulting in the establishment of more than 50 commercial tissue culture laboratories between 1987 and 1995, with a combined capacity generating over 210 million plants annually.

Pros and strengths

Collaboration with Dutch technology: Partnering with Dutch technology firm offers a great opportunity to benefit from their global expertise in innovation, sustainability, and advanced technology. The Netherlands is known for its strengths in areas like renewable energy, agriculture technology, water management, and smart infrastructure. Working together can help the company adopts advanced solutions that align with its goals. This collaboration provides access to new research, shared knowledge, and strong tech networks, helping the company stays competitive while supporting sustainable growth. Using this technology will improve the company’s efficiency and ensure it follows global best practices for lasting success.  

Dedicated team for procuring government tenders: The company has a dedicated team focused on identifying, applying for, and managing government tenders. This team ensures compliance with all regulatory requirements, prepares competitive proposals, and maintains strong relationships with government bodies. Their expertise helps the company secures valuable contracts, contributing to its growth and expanding its presence in government projects.

Green house facilities which protects plants from hardening: The company’s greenhouse facilities are designed to provide a controlled environment that protects plants during the critical hardening stage. These facilities shield plants from harsh weather conditions, pests, and other external factors, ensuring they grow strong and healthy. By maintaining the right temperature, humidity, and light levels, the greenhouses create an ideal setting for plants to adapt and thrive, improving their quality and survival rate. This advanced setup helps the company deliver reliable planting materials to meet the needs of its customers.

Risks and concerns

Depend on government tenders: The company heavily relies on securing government tenders, which provide essential financial support for the business operations. For FY 2024-25, 2023-24 and FY 2022-23, revenue generated from government tenders accounted for approximately 56.63%, 72.19% and 68.47% respectively. Any unavailability of these tenders or failure to successfully bid for them in the future could have detrimental effects on the company’s business, potentially leading to cash flow challenges, inability to invest in necessary resources, and diminished operational capacity.   

Seasonal fluctuations: The company’s business operations may be affected by seasonal factors such as Heavy or sustained rainfalls, flood cyclones or other extreme weather conditions, which may restrict its ability to carry on activities related to its agricultural projects, landscaping projects and fully utilize its resources. The above could result in delays or disruptions to its operations during the critical periods of its projects and cause severe damage to its premises and equipment’s. 

Depend on limited number of customers: The company depends on a limited number of customers for a significant portion of its revenues. For the financial years ended March 31, 2025, March 31, 2024, and March 31, 2023, its top ten customers accounted for approximately 28.32%, 40.33%, and 37.64%, respectively, of its revenue from operations. The loss of a major customer or significant reduction in demand from any of its major customers may adversely affect its business, financial condition, results of operations and prospects. 

Outlook

Sheel Biotech is an ISO 9001:2015, ISO 14001:2015 & ISO 45001:2018 certified company in the field of Bio-technology, Floriculture, Green Houses, Organic Adoption & Certification and Turnkey Projects with its Head Office at New Delhi and regional offices all over India. The company is managed by industry experts and professionals with outstanding knowledge in the Floriculture, Horticulture, Agriculture, Biotechnology and Green Houses. The company’s Research and Development lab is duly recognized by the Department of Biotechnology (DBT), Department of Science and Technology (DST), Government of India. On the concern side, timely delivery of government projects is paramount to the company’s continued success. If it fails to meet deadlines for government projects, there is a high probability that its chances of securing future bids will substantially decrease. Such delays could negatively impact its business, financial stability, operational outcomes, and future opportunities. Also, the company requires high working capital for its smooth day to day operations of business and any discontinuance or its inability to procure adequate working capital timely and on favorable terms may have an adverse effect on its operations, profitability and growth prospects. 

The issue has been offering 54,00,000 shares in a price band of Rs 59-63 per equity share. The aggregate size of the offer is around Rs 31.86 crore to Rs 34.02 crore based on lower and upper price band respectively. On performance front, total income for the financial year 2024-25 stood at Rs 10,227.08 lakh whereas in the financial year 2023-24, it stood at Rs 9,254.64 lakh, representing an increase of 10.51%. The restated profit after tax for the financial year 2024-2025 stood at Rs 1,063.61 lakh whereas for the financial year 2023-24, it stood at Rs. 1,047.47 lakh, representing an increase of 1.54%.

The company strives to be a provider of sustainable agricultural practices, biotechnology projects, organic farming, farmer-producer organizations, and Agro-skill development. It aims to revolutionize the farming landscape through innovation, quality, and commitment to environmental stewardship. It envisions a future where advanced agricultural practices ensure food security, improve farmer’s livelihoods, and protect the planet. By harnessing its advanced technology and fostering collaboration, it aims to create a thriving, sustainable ecosystem for current and future generations.