SeedWorks International, a leading seed research and development company, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO). The IPO is entirely an Offer-for-Sale (OFS) of up to 5.19 crore equity shares by the company’s promoters and investors, with a face value of ₹2 per share.
The Offer-for-Sale includes shares being sold by key stakeholders: True North Fund V LLP (3.99 crore shares), South Asia Growth Fund II Holdings LLC (1.09 crore shares), Dr. Balalji Manmohan Nukal (10.44 lakh shares), and South Asia EBT Trust (82,055 shares). The IPO will also feature a reservation for eligible employees with a discount offered in the employee reservation portion.
The public issue follows a book-building process, where:
- 50% of the net offer is allocated to Qualified Institutional Buyers (QIBs),
- 15% to Non-Institutional Investors (NIIs), and
- 35% to Retail Individual Investors (RIIs).
Strong Market Position and Expansion Plans
SeedWorks International specializes in hybrid and open-pollinated variety (OPV) seeds for major crops like rice, cotton, pearl millet, mustard, vegetables, and fruits. The company has shown remarkable growth, recording a Compound Annual Growth Rate (CAGR) of 11.98% between FY21 and FY24, making it the second-fastest-growing Indian seed company by revenue.
According to its DRHP, SeedWorks holds a leading market position in India:
- Third in cotton seed sales (market share increased from 5.60% in FY21 to 6.45% in FY24).
- Fourth in hybrid rice seed sales (market share grew from 7.10% to 7.30%).
- Fourth in pearl millet seed sales, with a 4.90% market share within just five years of commercializing the segment.
Beyond India, the company has a strong presence in global markets, ranking:
- Fourth in hybrid rice seed sales in the Philippines (12% market share in CY23).
- Among the top four in Nepal (26%-29% market share in CY24).
- Expanding operations in Kenya, Malawi, Burkina Faso, and Nigeria, focusing on cotton and vegetable crops.
Innovation-Driven Growth Strategy
SeedWorks International prioritizes product development and research, ensuring high-yield, disease-resistant seeds through strategic collaborations with global industry leaders. Notably, it holds licenses for BASF’s ‘Provisia’ and ‘Clearfield’ herbicide-tolerant rice technologies, boosting its ability to develop hybrid rice in India and the Philippines.
To maintain product quality, the company operates:
- Six grow-out test locations for seed quality assurance.
- A 7,500 sq. ft. advanced quality control lab with cutting-edge testing infrastructure.
- Pre-season (PSA), product differentiation (PDA), and off-season (OSA) activities to ensure consistent seed quality and farmer engagement.
Financial Performance
SeedWorks International reported strong financial growth, with revenues rising from ₹488.31 crore in FY23 to ₹522.69 crore in FY24, driven by increased seed sales. For the six months ending September 30, 2024, the company recorded:
- Revenue of ₹407.50 crore.
- Profit after tax (PAT) of ₹70.25 crore.
IPO Management and Listing Plans
The IPO is being managed by Equirus Capital Private Limited, DAM Capital Advisors Limited, and SBI Capital Markets Limited, with KFin Technologies Limited as the registrar. SeedWorks International’s equity shares are proposed to be listed on the National Stock Exchange (NSE) and BSE Limited.
This IPO is expected to help the company fuel its expansion plans, strengthen its research capabilities, and solidify its leadership position in India and key international markets.
