Yashhtej Industries (India) IPO

Yashhtej operates in the solvent extraction and edible oil processing industry, a critical part of India’s agri-value chain. Solvent extraction is the dominant industrial method for extracting oil from oilseeds such as soybean and other oil-bearing materials.

Industry Context (India)

The industry is cyclical and influenced by oilseed availability, MSP policies, global edible oil prices, and import duties, making operational efficiency and cost control critical.

Yashhtej Industries is engaged in the solvent extraction of edible oils, primarily processing oil-bearing raw materials into crude oil and by-products.

Key Business Activities

The company operates on a B2B business model, supplying to refiners and institutional buyers rather than retail consumers. Revenue generation is volume-driven and closely linked to commodity cycles.

The company operates under multiple industrial, environmental, and corporate regulations, given the nature of solvent-based processing.

Major Applicable Regulations

Compliance with environmental and safety norms is particularly critical due to the use of hexane, a regulated industrial solvent.

Business Risks

• Exposure to volatile raw material prices

• Dependence on agricultural output and monsoon patterns

• Commodity-linked margin fluctuations

Operational Risks

• Fire and safety risks inherent in solvent extraction

• Machinery downtime impacting throughput

• Energy and fuel cost sensitivity

Regulatory Risks

• Environmental compliance enforcement

• Changes in edible oil import/export policies

The company is promoted by three individuals with direct operational oversight.

Promoters

The promoters are actively involved in strategic decisions, operations, and expansion planning, ensuring continuity of management post-listing.

As per the disclosures under “Group Entities of Our Company”, Yashhtej Industries does not have subsidiaries. Group companies, if any, are disclosed only for regulatory purposes and do not materially affect core operations

The company follows a promoter-driven management structure, supported by professional executives.

Key Management Personnel

This structure ensures separation between operational execution and financial compliance.

Post conversion to a public company, Yashhtej has strengthened its governance framework.

Statutory Committees

The governance structure is aligned with SEBI SME and Companies Act requirements, supporting transparency for public shareholders.

As disclosed under “Outstanding Litigations and Material Developments”, Yashhtej Industries (India) Limited has no criminal cases, no material civil litigations, and no regulatory proceedings pending against the company, its promoters, or directors as on the date of the Draft Prospectus.

Litigation Status Summary

The absence of litigations reduces execution risk and indicates stable regulatory standing for a manufacturing-led SME business

The company operates a solvent extraction plant and hence requires multiple industrial and environmental approvals. As per disclosures, all material approvals required for operations are in place.

Key Statutory Approvals

Failure to maintain these approvals could impact production continuity, making compliance a critical operational focus.

Yashhtej has disclosed restated standalone financials for FY23, FY24, and FY25. The company witnessed sharp scale-up in operations during FY25.

Summary Financials (₹ in Lakhs)

FY25 reflects a post-commissioning scale-up, supported by full utilisation of the solvent extraction facility

The company has relied on bank borrowings for working capital and plant setup.

Indebtedness Snapshot (₹ in Lakhs)

There are no defaults, restructuring, or rescheduling of loans, and no conversion of debt into equity has occurred

The company’s cash flows reflect a manufacturing expansion phase, with significant capital expenditure in prior years.

Cash Flow Summary (₹ in Lakhs)

Operating cash flows turned positive in FY25, indicating improved working capital efficiency post scale-up

Key Ratios (FY25)

The ratios suggest aggressive but controlled expansion, typical for early-stage manufacturing SMEs.

Management attributes FY25 performance to:

• Full-year operation of soybean solvent extraction plant

• Higher capacity utilisation

• Improved procurement and logistics efficiency

Strategic Focus Areas

• Scaling solvent extraction volumes

• Cost optimisation in power and fuel

• Leveraging captive solar power for energy cost savings

• Expanding B2B customer base

The company does not pursue speculative commodity trading and focuses on processing-driven margins.

The IPO is a 100% Fresh Issue. Proceeds will be used for strengthening operations and financial position.

Objects of the Issue

No proceeds will be used for promoter exits or debt repayment to related parties.

The issue price will be determined under the Fixed Price Issue mechanism, based on:

• FY25 earnings base

• Net worth post expansion

• Asset-backed manufacturing model

• Comparable SME edible oil processors

The pricing is aligned with SEBI ICDR requirements and reflects recent operational scale-up rather than long operating history.

Yashhtej Industries has an equity share capital of face value ₹10 per share. In preparation for the IPO, the company increased its authorised share capital and restructured its equity base.

Share Capital Details

The issue results in capital infusion without promoter stake monetisation, as there is no Offer for Sale (OFS)

Post listing, the shareholding will be divided between promoters and public shareholders in compliance with SME listing norms.

Indicative Post-Issue Shareholding

The company will comply with minimum public shareholding requirements prescribed under SEBI ICDR Regulations.

Yashhtej Industries does not have a formal dividend policy. Dividend declaration, if any, will be at the discretion of the Board and subject to shareholder approval.

Dividend Policy Highlights

• No dividend declared in last three financial years

• Focus on reinvestment for working capital and growth

• Dividends dependent on profits, cash flows, and capex needs

Past non-declaration of dividends should not be considered indicative of future dividend decisions

Tax implications will depend on the holding period and investor category.

Indicative Tax Treatment

Investors are advised to consult tax advisors for personalised assessment.

The company has disclosed related party transactions as per applicable accounting standards.

Nature of Related Party Transactions

There are no material related party transactions that adversely impact financials or involve diversion of funds

The company has entered into key agreements for the IPO process.

Material Agreements

These agreements are available for inspection as disclosed in the Prospectus.

The IPO is a 100% Fixed Price Issue under Chapter IX of SEBI ICDR Regulations.

Allocation Structure

Unsubscribed portions may be reallocated across categories as per SEBI norms

Equity shareholders will enjoy rights under the Companies Act, 2013 and Articles of Association.

Key Rights

• One vote per equity share

• Right to receive dividends (if declared)

• Right to transfer shares

• Right to residual assets on liquidation

Additional Confirmations

• No defaults on borrowings

• No insolvency or NCLT proceedings

• No suspension or debarment by SEBI

• 100% promoter shareholding in dematerialised form

• Mandatory market making for 3 years post listing

These disclosures ensure compliance with SEBI SME eligibility and governance norms