SeedWorks International IPO

SeedWorks International Limited IPO Strengths

• Second Fastest Growing Seed Company with Strong Market Leadership

SeedWorks International Limited is India’s second fastest-growing seed company, with an 11.98% CAGR in revenue from Fiscal 2021 to 2024. It holds leading positions in cotton, hybrid rice, and pearl millet, strengthening its market presence across India, the Philippines, and Nepal through a diversified crop portfolio and strategic expansion.

• Robust R&D Capabilities Backed by Advanced Technology and Collaborations

SeedWorks research-driven approach enhances seed genetics, ensuring higher yield potential. The seed industry demands continuous innovation due to high entry barriers and long development cycles. With advanced infrastructure, digital tools, and strategic partnerships, they lead in sustainable seed solutions, strengthening farmer productivity and addressing agricultural challenges effectively.

• Strong Brand Equity Through Differentiated Products and Farmer Engagement

The company’s differentiated products, superior traits, and deep farmer connections have strengthened its brand equity. With a focus on high-yield, disease-resistant seeds, it has gained trust in India’s seed market. Its innovative hybrids, digital initiatives, and farmer engagement strategies ensure consistent performance, making it a top player in the fragmented seed industry

• Extensive Pan-India Presence with Efficient Supply Chain Capabilities

The company’s strong distribution network ensures timely delivery of agri-inputs to scattered end-users across India. Its vast reach, strategic partnerships, and advanced infrastructure provide a competitive edge. With dedicated processing facilities, warehouses, and over 4,000 distributors, it maintains an efficient supply chain, enhancing farmer engagement and trust.

• Experienced Leadership with Strong Governance and Sustainability Initiatives

The company is led by a team of seasoned industry professionals, ensuring strategic direction and operational excellence. A robust governance framework, supported by independent directors, drives transparency and efficiency. Recognized for sustainability efforts, it has implemented carbon reduction initiatives, smart irrigation, and plastic waste management, reinforcing its commitment to environmental responsibility.

More About SeedWorks International Limited

SeedWorks International Limited specialises in research, production, and marketing of hybrid seeds for rice, cotton, pearl millet, mustard, vegetables, and fruits. Additionally, the company develops open-pollinated variety (OPV) seeds for rice, wheat, and mustard.

• Rapid Growth: The company is the second-fastest-growing Indian seed company in terms of revenue (CAGR of 11.98% from Fiscal 2021 to Fiscal 2024). (Source: F&S Report)

• Market Leadership: Ranked third in cotton seeds, fourth in hybrid rice, and fourth in pearl millet in terms of volume sold in India (Fiscal 2024). (Source: F&S Report)

• Expanding Footprint: Present in the Philippines and Nepal, SeedWorks holds a 12% market share in the hybrid rice category in the Philippines (CY 2023) and a 26-29% share in Nepal (CY 2024). Plans are underway to expand into Africa, targeting Kenya, Malawi, Burkina Faso, and Nigeria. (Source: F&S Report)

Robust R&D and Technological Advancements

SeedWorks prioritises research and development (R&D) to drive innovation. The company has established partnerships with multinational corporations, public institutions, and start-ups to enhance its breeding technologies and seed traits.

• Strategic Collaborations: Licensee of BASF’s ‘Provisia’ and ‘Clearfield’ herbicide-tolerant rice technologies.

• Advanced Infrastructure: R&D facilities focus on hybrid development, disease tolerance, and yield improvement.

• Stringent Quality Control: ISO/IEC 17025:2017 NABL-accredited laboratory ensures genetic purity and seed health.

Efficient Supply Chain and Farmer Engagement

A well-integrated supply chain ensures timely delivery of high-quality seeds. The company also focuses on farmer education and engagement through pre-season, in-season, and post-season activities.

• Outreach Initiatives: Participation in national agricultural forums, field demonstrations, and training programs.

• Sustainable Practices: Smart irrigation techniques and waste-to-energy conversion help reduce environmental impact.

Leadership and Governance

SeedWorks is managed by an experienced leadership team with prior expertise in companies like Monsanto, Advanta, and Marico. Supported by private equity investors, the company follows a strong governance framework.

Commitment to Sustainability and ESG

The company has adopted the SRISHTEe framework, focusing on carbon, water, energy, nitrogen, knowledge, and weather.

• Carbon Reduction: Over 820 metric tons of CO₂ reduction in Fiscal 2024.

• Water Conservation: Over 14 billion litres of water saved annually.

• Plastic Waste Management: Collected and disposed of 222 metric tons of plastic waste in Fiscal 2024.

• Recognition: Awarded for soil and water conservation, climate resilience, and sustainable carbon management practices.

SeedWorks International Limited remains committed to driving agricultural innovation, supporting farmers, and advancing sustainable farming solutions globally.

Industry Outlook

Market Overview

The Indian seed industry has demonstrated robust growth in recent years, driven by increasing agricultural demands and technological advancements.

• Market Size and Growth: In 2024, the industry was valued at approximately USD 7.8 billion and is projected to reach USD 19.0 billion by 2033, reflecting a compound annual growth rate (CAGR) of 10.5% during the forecast period.

Growth Drivers

Several factors contribute to the industry’s expansion:

• Rising Population and Food Demand: The escalating population necessitates increased food production, thereby boosting the demand for high-quality seeds.

• Technological Advancements: Innovations in seed technology, including the development of hybrid and genetically modified (GM) seeds, enhance crop yields and resilience.

• Government Initiatives: Policies promoting seed production and distribution, along with support for research and development, further stimulate market growth.

Segment Analysis

• Seed Types:

• Hybrid Seeds: Dominating the market due to their high yield potential and disease resistance.

• Genetically Modified (GM) Seeds: Gaining traction for their ability to improve crop yield and reduce pesticide usage.

• Conventional Seeds: Experiencing slower growth as farmers increasingly prefer advanced seed varieties.

• Crop Types:

• Field Crops: Comprising cereals, millets, oilseeds, and pulses, this segment holds a significant market share.

• Horticulture Crops: Including vegetables, fruits, and flowers, this segment is witnessing substantial growth driven by rising consumer demand.

Key Figures

• Hybrid Seeds Market Share: In 2023, hybrid seeds held the largest market share, a trend expected to continue due to their advantages in yield and adaptability.

• Distribution Channels:

• Direct Sales: Valued at USD 1.65 billion in 2023, projected to reach USD 3.2 billion by 2032, with a CAGR of 8.6%.

• Distributors: Held a market share of USD 1.42 billion in 2023, anticipated to grow at a CAGR of 9.3% to reach USD 2.7 billion by 2032.

• Retailers: Accounted for USD 1.03 billion in 2023, expected to expand at a CAGR of 8.9% to reach USD 1.9 billion by 2032.

Future Outlook

The Indian seed industry is poised for sustained growth, underpinned by:

• Increased Adoption of Advanced Seed Varieties: Farmers are progressively embracing hybrid and GM seeds to enhance productivity.

• Expansion into New Markets: Companies are exploring opportunities in untapped regions and diversifying their product portfolios.

• Sustainability Initiatives: Emphasis on environmentally friendly practices and development of climate-resilient seed varieties.

Overall, the Indian seed industry presents a dynamic and promising landscape, offering substantial opportunities for growth and innovation.

How Will SeedWorks International Limited Benefit

• Increased Market Demand: Growing agricultural needs and hybrid seed adoption will boost SeedWorks’ sales across rice, cotton, and millet segments.

• Revenue Growth: With the seed industry expanding at a 10.5% CAGR, SeedWorks is positioned to enhance its 11.98% revenue growth rate.

• Technological Edge: SeedWorks’ advanced R&D and partnerships, such as BASF’s herbicide-tolerant technologies, will strengthen its competitive advantage.

• Expanded Market Presence: Planned expansions into Africa, coupled with strong footholds in India, Nepal, and the Philippines, will drive growth.

• Hybrid Seed Leadership: Dominance in hybrid rice, cotton, and millet segments will align with the industry shift towards high-yield seed varieties.

• Sustainability Recognition: SeedWorks’ ESG efforts, including carbon reduction and water conservation, will enhance its reputation in sustainable agriculture.

• Farmer-Centric Approach: Engagement initiatives, including training programs and field demonstrations, will strengthen trust and brand loyalty among farmers.

• Efficient Supply Chain: A robust distribution network ensures timely seed availability, supporting the industry’s increasing reliance on quality hybrid seeds.

• Increased R&D Investments: The growing seed industry will support further innovation in disease-resistant and climate-resilient seed development at SeedWorks.

• Strategic Collaborations: Alliances with research institutions and corporations will enhance SeedWorks’ breeding programs and next-gen seed technologies.

SeedWorks International Limited IPO Overview

SeedWorks International has submitted its Draft Red Herring Prospectus (DRHP) to SEBI for an initial public offering (IPO) comprising a complete offer-for-sale (OFS) of up to 5.19 crore equity shares. The company plans to list its shares on the NSE and BSE. Key stakeholders participating in the OFS include True North Fund V LLP (3.99 crore shares), South Asia Growth Fund II Holdings LLC (1.09 crore shares), Dr. Balaji Manmohan Nukal (10.44 lakh shares), and South Asia EBT Trust (82,055 shares).

SeedWorks International Limited Upcoming IPO Details

Category	Details
Issue Type	Book Built Issue IPO
Total Issue Size	Fresh Issue: NA Offer for Sale (OFS): 5.20 crore equity shares
IPO Dates	TBA
Price Bands	TBA
Lot Size	TBA
Face Value	₹2 per share
Listing Exchange	BSE, NSE
Shareholding pre-issue	TBA
Shareholding post -issue	TBA

SeedWorks International IPO Important Dates

IPO Activity	Date
IPO Open Date	TBA
IPO Close Date	TBA
Basis of Allotment Date	TBA
Refunds Initiation	TBA
Credit of Shares to Demat	TBA
IPO Listing Date	TBA

SeedWorks International IPO Lots

Application	Lots	Shares	Amount
Retail (Min)	TBA	TBA	TBA
Retail (Max)	TBA	TBA	TBA
S-HNI (Min)	TBA	TBA	TBA
S-HNI (Max)	TBA	TBA	TBA
B-HNI (Min)	TBA	TBA	TBA

SeedWorks International Limited IPO Valuation Overview

KPI	Value
Earnings Per Share (EPS)	0.40
Price/Earnings (P/E) Ratio	TBD
Return on Net Worth (RoNW)	5.74%
Net Asset Value (NAV)	7.28
Return on Equity	5.68%
Return on Capital Employed (ROCE)	10.30%
EBITDA Margin	6.76%
PAT Margin	0.95%
Debt to Equity Ratio	0.87

Peer Group Comparison

Name of the Company	Revenue (₹ million)	Face Value per Equity Share (₹)	P/E Ratio	EPS (₹ per share)	RoNW (%)	NAV (₹ per share)
Seedworks International Limited	5,226.88	2	N.A.	0.39	5.74	7.28
Peer Group
Kaveri Seed Company Limited	11,484.05	2	16.53	54.58	23.04	240.29

Key Insights

• Revenue Comparison: SeedWorks International reported a revenue of ₹5,226.88 million, significantly lower than Kaveri Seed’s ₹11,484.05 million. This indicates that while SeedWorks is growing, it still trails behind its competitor in terms of market scale.

• Face Value per Share: Both companies have a face value of ₹2 per equity share, ensuring consistency in nominal stock value. This allows investors to compare their share prices and valuations on an equal basis within the seed industry.

• Price-to-Earnings (P/E) Ratio: SeedWorks’ P/E ratio is unavailable, likely due to a lack of earnings history or recent losses. In contrast, Kaveri Seed’s P/E ratio of 16.53 reflects strong profitability and market confidence in its earnings potential.

• Earnings Per Share (EPS): SeedWorks reported a diluted EPS of ₹0.39, significantly lower than Kaveri Seed’s ₹54.58. This suggests that Kaveri Seed generates higher profits per share, making it more attractive to investors seeking stable returns.

• Return on Net Worth (RoNW): With an RoNW of 5.74%, SeedWorks demonstrates modest profitability, whereas Kaveri Seed’s 23.04% indicates superior efficiency in generating returns from its equity base, showcasing its strong financial health and operational efficiency.

• Net Asset Value (NAV) Per Share: SeedWorks’ NAV per share is ₹7.28, much lower than Kaveri Seed’s ₹240.29. This highlights a smaller asset base and lower intrinsic value per share, which may impact investor perception and valuation in the long run.

Objectives of the IPO Proceeds

• Being entirely an OFS issues, the IPO proceeds will entirely go to the selling shareholders and the company will not use the proceeds for corporate purpose

SeedWorks International Limited Financials (in million)

Particulars	30 Sept 2024	31 Mar 2024	31 Mar 2023	31 Mar 2022
Assets	4206.83	5977.64	4183.24	3771.07
Revenue	4075.02	5226.88	4883.07	4571.58
Profit After Tax	702.48	49.51	53.69	243.38
Reserves and Surplus	1358.70	659.39	601.67	516.98
Total Borrowings	732.20	1039.94	936.05	770.50
Total Liabilities	2607.38	5077.50	3340.82	3013.33

Key Strategies for SeedWorks International Limited

• Expanding Market Share and Global Reach

SeedWorks International Limited aims to strengthen its market presence across existing crops and regions while expanding into new geographies. With a focus on advanced hybrids, institutional sales, and strategic partnerships, the company seeks sustainable growth in India, the Philippines, Nepal, and Africa.

• Expanding Product Portfolio with Differentiated Hybrids

SeedWorks International Limited strengthens its portfolio with differentiated hybrids, leveraging R&D to introduce high-performing crops. Focused on innovation, it enhances market presence, meets evolving demands, and drives sustainable growth. Strategic expansion in the Philippines reinforces its competitive edge, providing farmers with reliable, next-generation solutions.

• Driving Margin Expansion Through Strategic Growth

SeedWorks International Limited focuses on EBITDA margin expansion by optimizing product mix, leveraging economies of scale, and enhancing operational efficiencies. Emphasizing high-margin crops like hybrid mustard, pearl millet, and vegetables, the company strategically strengthens its portfolio, ensuring sustainable profitability and long-term competitive advantage in the agricultural sector.