Star Agriwarehousing Files ₹450 Crore IPO Papers with SEBI: All You Need to Know

Star Agriwarehousing Business Profile

Star Agriwarehousing operates in agricultural marketing and provides a range of services, including procurement, trade facilitation, warehousing, collateral management, financing solutions, digital marketplace services, and data-driven technology solutions.

Strengths

1. The company operates across multiple points in the agricultural value chain, creating a strong networking effect. It manages a pan-India network of 2,189 warehouses across 379 locations in 19 states, serving as procurement and delivery centres and providing storage solutions. This diversified presence strengthens its role in the agricultural ecosystem.
2. The company uses a technology-driven approach to streamline operations and enhance efficiency. This integration of technology optimizes the agricultural value chain.
3. The company strategically utilizes its various business segments to create synergies and enhance its overall value proposition. Cross-leveraging efforts help expand their customer base
4. The leadership team brings a wealth of experience in the agricultural sector. They guide the company's strategic direction and growth.

Weaknesses

1. The company's reliance on its warehouses is critical. A significant shutdown or underutilization of these facilities could negatively impact its business, financial health, and operations.  
2. As of June 30, 2024, 62.06% of the company's 723 professional warehouses operate on a revenue-share basis, while 36.05% (420 warehouses) are leased. There is no guarantee that these agreements will be renewed or that similar commercial terms will be available in the future.  
3. The Collateral Management business faces various risks and challenges that could harm the company’s reputation, financial stability, and operational results.  
4. The company, its directors, promoters, and subsidiaries are involved in several outstanding legal proceedings. Unfavorable outcomes in these cases could harm the company's reputation, financial health, and business prospects.  
5. The business is cyclical and vulnerable to seasonal variations and adverse local and global weather patterns, which can negatively impact operations and financial performance. Additionally, changes in government policies or a reduction in subsidies and incentives for the agriculture sector could further affect the company's results.
   

Star Agriwarehousing Financials

• Reported revenue of Rs 989.25 crore in FY24, a 41.82% year-on-year gain from Rs 697.56 crore in the previous fiscal year.
• The company’s profit after tax also increased by 162.30% to Rs 46.66 crore in FY24 from Rs 28.75 crore in FY23.

Key Ratios

This IPO represents a step forward for the company as it seeks to expand its operational capabilities and strengthen its financial position.