SSMD Agrotech’s MD, Ishu Munjal, shared the company’s journey from a small Delhi shop to a fast-growing food manufacturer with micro-manufacturing dark stores and the IPO. He also discussed challenges, expansion plans and the team effort driving the brand forward. Tune in to the entire interview:
Mubina Kapasi: Hello everyone and welcome to SmallCap Spotlight. I’m Mubina Kapasi and as you know, this is the platform where we bring to you interesting companies, especially in the small cap space, tell you a bit about their business. Today we have with us a company in the agrotech space that has recently undergone a transformation in the name and is on the anvil of being listed.
I have with me the Managing Director of SSMD Agrotech Limited, Mr. Ishu Munjal. Thank you so much Mr. Munjal for joining us. I think to begin with, I’d like you to introduce SSMD Agrotech India to our viewers.
There’s been this transition from Sri Dhanlakshmi Flower Mills to of course SSMD. I’d like to know a little bit about the company, the origins, the key milestones that the company has been through recently.
Ishu Munjal: Yeah. So I’m Ishu Munjal, being a Managing Director at the company, SSMD Agrotech India Limited from the house of Manohar Group. The journey started a long time back in the year 1980, from a small trading shop in Old Delhi and started by my grandfather and father. And that shop, in a very short span of time, got famous by the name of Manohar Channawala, as we were the first to introduce that kind of a product.
Then I joined the business in the year 2016, post completion of my B.Tech in Information and Technologies. And during the early years at the family office, I was trying to understand the business at the ground level. I was interacting a lot with the retailers and the distributors already in our network.
And then I realized there were a lot of loopholes in the existing business, as the business was purely a trading business of agro food products. And also during the early years, I was exploring a lot of opportunities in the online grocery space. And I even launched a startup by the name of Grossmart, but we did not float that idea ahead in the market as we couldn’t find any kind of a differentiating factor other than, you know, growers and big basket at that time.
Then in the year 2018, post spending like two and a half years at the family office and trying to understand the business economics. I thought of, you know, transitioning the business to manufacturing and shifting the business from being purely trading business to a manufacturing business as well. And I set up the first manufacturing facility in the year 2018, where we started manufacturing gram flour with very little knowledge about manufacturing and from a very small unit.
And, but by God’s grace in a very short span of time, we’ve got very good response from the market and we had to close at first unit and shift to a bigger unit in the year 2019. Then in the year 2021, we set up another manufacturing facility and we started manufacturing gram flour, chana dal, which is a major raw material for, which we used to procure from outside for the manufacturing of gram flour. Followed by in the year 2022, we set up a second manufacturing facility and we launched another brand by the name of SuperSS and we started manufacturing puffed rice and ramdana and proud to say that today we hold 90% market capacity in that space, in those products, with we being the only producer of ramdana in the Delhi NCR market.
And then in the year 2023, we set up the third manufacturing facility for the company and that manufacturing facility, we started manufacturing for the value added products like idli, rava, rice powder, chana, sattu and proud to say that today the company has a portfolio of more than 45 STUs and we are covering the entire Northern India market through a distributor led model, as well as we have direct institutional customers. Also in the year 2024, we got an in-principle approval of a $10 million investment in a company and that money was basically coming, was coming in the form of an FDI through CCD, but we did not close that idea ahead, that round ahead because we and the, you know, the investors could not get onto a common term sheet. Then in the early 2025, we launched the D2C Darkstore model for the company.
It is one of a kind Darkstore model in which we set up for micro manufacturing facilities and we started manufacturing and delivering fresh flour, oil and spices to the customers in a time span of 10 to 15 minutes. So we combined the all hype, you know, quick commerce with freshness. So that gained a lot of attraction for the company.
And now we are coming out with the company’s IPO, which is scheduled to open on 24th of November with the listing scheduled for the 1st of December. And the IPO that we are getting out is of 34 crore rupees and of which 13 crores is roughly will be utilized for the working capital requirement of the company. And 6.83 crores would be required to pay off the company’s debt.
And two crores will be put into the setting above 16 more such micro manufacturing facilities, which I just mentioned. And one crore would be put into the setting above Namkeen manufacturing facility. So the company is expanding its portfolio and diversifying into different categories by the setting above these manufacturing plants and becoming and willing to become a household name under the house of Manohar umbrella.
We have four particular brands. One is Manohar Agro, then SuperSS, then Shri Dhan Lakshmi and then Delhi Special. Also the company has a lot of future milestones to achieve and a future roadmap working of which has already been started in the companies, which is a part of the company’s future roadmap thing.
Yeah, so this is a small story about us, where we come from and what we are doing, yeah.
Mubina Kapasi: Thank you so much for that. And Mr. Munjal, very interesting micro manufacturing stores.
Now here’s where I’m wondering, why would you not just do what the other FMCG players do? And that is supply to the dark stores from where your quick commerce distributors would just pick up and sell. Why manufacture at these locations? Because I imagine that’s a cost. I’m sure that considering you’re selling to the consumer directly, your margins will be very good.
But I’m wondering why manufacture these micro, at this micro level.
Ishu Munjal: See a lot of today, people have become a lot conscious about consuming healthy food products and they are willing to spend a handsome amount in procuring that kind of a product, right? If I talk about an example, like you mentioned that you ordered any kind of a particular brands, Ata from Zepto or Blinkit. So that is something which is produced in the manufacturing facility.
I guess, let’s just say one month back, then brought down to the company’s warehouse, from there brought down to the Zepto’s mother warehouse, from there brought down to the Zepto’s or Blinkit’s dark store and then given to the customers, right? The idea behind launching these micro manufacturing facilities is to deliver fresh produce to the customers. As you know, a lot of people have become a lot about, you know, aware about the freshness that they want to eat and they’re willing to spend amount on it. So this is a whole story about delivering freshness in quick time.
Mubina Kapasi: So you are charging a bit of a premium for this compared to perhaps the other manufacturers?
Ishu Munjal: See, we don’t have any kind of a premium over the MRP covering these costs because there’s a reason being, you know, when we are dealing with players like Zepto and Blinkit. So there’s a lot of margin sharing with these players when we are setting up our own micro manufacturing facilities and dealing with the customers directly.
Mubina Kapasi: So sorry if I could just interject, what I meant is that, would you say that your product then is a bit more expensive than perhaps the other in your segments? That’s what I meant because you’re- Slight expensive but not that expensive.
Ishu Munjal: I guess if I talk about a single product of let’s just say atta, which you might procure from a nearby atta chatti at a price of like just 50 rupees per kg. So we’ll be giving it at somewhere between 55 rupees per kg. Because a traditional way of delivering that product has been changed and has been modernized through our micro manufacturing facilities and that kind of attractive packaging and then good quality in a quick commerce time add some value to the pricing as well.
But not just a slight change and increase in the price segment, but not very much.
Mubina Kapasi: No, of course. And I think the fact that you are providing this sort of facility and you’re right, the customers are also becoming more health conscious.
And if you’re providing this kind of a proposition, I’m sure there are customers who would be interested in getting that freshly grounded product.
Ishu Munjal: A very good response from the pilot store that we recently launched. We started the operation in April, 2025 from a residential society based in Ghaziabad.
And we targeted that each store would be adding up a top line of four to five lakh rupees as part of the revenue on monthly basis. And just in six months of operations, we’ve already touched that figure. And seeing the repeat orders that we are getting instills a kind of a confidence that there has been some acceptance created for our product.
Mubina Kapasi: Yeah. Yeah, okay. Superb.
All right. We love to hear about the management’s own personal journey. This is of course a business that is a couple of generations down the line.
I wanna know what inspired you to take on the leadership of SSMD Agrotech. I think you brought on a bunch of different initiatives, made the company more of a foods business, if I could call it that, than your agro or flower, et cetera. You’ve constantly gone up the value chain in what you’re providing.
But yeah, I’d just like to know a little bit about your own background and how did your career come to this point where you are now the MD of SSMD?
Ishu Munjal: So the journey even started, I started working at the last year of my engineering and I was exploring opportunities to do something in the startup space, because of which I even launched that startup by the name of Grossmart, which was into the online grocery space. By that moment, Big Basket was working in the warehousing model and then Grofers was working into the hyperlocal model. And I couldn’t find any kind of a differentiating factor at that time.
Then just to pass on to the business and to take the responsibility with very less idea and very less future planning, I got into the manufacturing space. But even during the initial time, I was still very much directed and interested towards launching a startup. And one instance happened in my life when I was about to launch a startup in the space of bike taxis, which players like Rapido and Porter are doing.
And that was in the year 2016, very the first year I joined the business. Then I went to all the authorities, asked them for some licensing so that bikes can be used as taxis, because there’s no such norm and rule defined where bikes can be used as taxis. But I couldn’t get any kind of a clarification and justification and I did not take that idea ahead.
Then in the year 2019, Rapido BlinkIt launched themselves into the same space without considering about the government norms and all. And today it’s a billion dollar company. And then I had that kind of a feeling of regret and then that phrase which shouts that, it’s better to try than to regret later on.
So that is something which gave me a lot of confidence as well as initially I regretted a lot that I did not even try. Then at that moment of time, I got this thing that whatever idea I have in my mind, I have to give it a shot, I have to give it a try. And then sensibility was that to carry forward the family business because I have some kind of a knowledge space and then knowledge sharing by our elders to get into the right direction.
And that is how I kept on evolving different ideas and kept on actually bringing them into action. And by God’s grace, we put in the management, put into the lot of efforts and hard work and that’s what we are here. And the journey has just started, I would say like Peyush Bansal just mentioned on the listing of his Lenskart that this is day zero.
So do I say that post the listing on the listing of our company, it will be the day zero, the show will just begin on that day.
Mubina Kapasi: No, very true. And it’s interesting to know and hear about all the ventures that you were as well involved with in the past, excuse me.
Could you share a bit about your time in SSMD Agrotech? Like I said, you’ve done a lot to increase the product portfolio and you’re constantly going to keep doing. I wanna know what are the day-to-day challenges you do tend to come across because it’s a food business. I’m sure things like hygiene, et cetera, very important.
At the same time, it’s very, very agri dependent. So seasonality, I’m sure plays a big role and with the kind of climate change we are seeing, I’m sure that’s a bakery that you have to deal with. I wanna know a little bit about these challenges you tend to face and how do you tackle them?
Ishu Munjal: See, I won’t call our brand a national brand, right? We call ourselves regional players, giving a tough competition to the national players.
And when we started working to push our product and brand into the market, which is new, we have to create a kind of an acceptance among the retailers and the distributors. So the company has been focusing on a very straight strategy that work on very low margins initially when you’re pushing a product or a brand in the market, give the best of the quality. And once a kind of an acceptance is created and brand is recalled and the product is recalled among the distributors and the retailers network, automatically the company will be able to increase onto the margins.
And that strategy has been a very successful strategy from the company from the very starting. Challenges like pushing a new brand into the market and then introducing a different kind of a product or working onto the best of the quality, understanding the seasonality like you mentioned, but working into the same industry from last 10 years and with the guidance of our elders who has been in the industry for a longer time than my personal experience. So we have got that kind of experience about when to procure the raw material, when to release the inventory, when is the right time to process it and how much time we need to hold the inventory and when to release it in the market.
So these are something which on a daily basis, I would say every day is a new learning day for us. And over the time, we kind of experience different challenges and then the fun is to find, keep finding solution to it. What my personal thing is like, if I feel like that everything is going very easy and handy, I feel like something is missing there.
If some problems and hurdles are there on the day-to-day business operations and everything, then I’m on toes and then I’m excited to keep working towards finding a solution to it. So I guess it’s a part and parcel and I take it very positively, these kind of hurdles and the challenges that keep arising out of any particular business operations and be it in the operation space, be it in the manufacturing space, being a fully compliant company, being in the agricultural sector, delivering food to the people, working on to make sure that the food that we are delivering and the products that we’re delivering are the best of the qualities. So a system put in together at the very initial stage of the nascent stage helps you tackle all these problems but obviously small problems and hurdles keep arising but the management and your job is to keep finding a solution for it and keep remain excited for new ventures and new opportunities to explore.
Mubina Kapasi: Could you walk us through your entire procurement process? Because I’m sure you’re dependent on farmers. Farmers in turn are also impacted by government policy, something like MSP. They’re impacted by climate, unseasonal rains, et cetera, have almost become like a seasonal, it’s become like a norm, honestly, unseasonal rates, et cetera.
So I just want to hear a little bit on how procurement goes by for you.
Ishu Munjal: So as per the rules and regulations and norms of procuring raw material for any kind of a miller, we are not allowed to procure directly from the farmers. So the farmer has to go out to a mandi which is situated nearby his farm and his crop area, and he has to sell it to a broker and then there’s a broker involved in between whom we are directly dealing with and then we procure it.
So different products that we are manufacturing for that we have to procure different raw materials. Let’s just say like for the manufacturing of chana dal, the chana is procured from mandis based in Rajasthan and then Andhra and then Maharashtra. Then the puffed rice that we manufacture for that rice is procured from direct millers that we have that the company and the management is directly in contact with them based in West Bengal and Chhattisgarh.
Then the ramdana that we procure is based on a raw material that is procured from Palanpur, Gujarat. So obviously seasonality effects, but this never a stoppage in the supply chain. Seasonality and all kinds of weather conditions which worsens the crop and all affects the overall pricing for the crop and the raw material.
But we have a steady control and in a network of a huge amount of millers and brokers involved in between and it creates a kind of a smooth procurement process for us.
Mubina Kapasi: Now, you are a part of the house of Manohar and there are several products and brands under that. I just want to understand the structure, especially when let’s say you’re launching a new brand, where is it housed? What’s the corporate structure like? If you could share some light on that.
Ishu Munjal: Oh, see, we tap into different geographical locations. We keep interacting with the already existing distributor network. We try to keep understanding their requirements and our team keeps on doing an R&D in the space that what kind of a product can be launched into the market.
Recently, we are exploring a space into a pet bottle drink which can be a healthy drink. If we talk about pet bottle drinks which are very highlighted these days, somewhat very much similar to Lahori Jeera. But there are a lot of products in the market.
There’s a product by the name of Gond Katira. I’m not sure about whether you are aware or the audience is aware about, but it has a lot of health benefits for the gut. And in China, in the US, and Gond Katira has also been written in the Ayurveda as a very healthy product.
So the company is exploring and looking for opportunities to launch a product or a drink, a healthy drink, basically a fizzy drink as well using Gond Katira as a central project. So we keep interacting at the ground level, at the retailers, counters, with the customers, directly with the retailers or with the distributors and keep exploring for what the market requires. And then once feedback comes from the market, then we start our work and then launch a brand or a product out in the market.
So the higher level of interaction that we do on a daily basis results in working our mind and doing the R&D work to explore different categories and products. Now, of course, like you mentioned, the IPO is going to be used for the dark stores, the micromanufacturing facilities. Plus I think there’s also for investments, the purchase of machineries and factories for the Namkeen plant.
Mubina Kapasi: So I just want to know that what’s your rough revenue mix like right now, because there are clearly very diversified sources of revenues and products. And post all of these investments, what’s the mix going to look like now? Because I imagine the mix is slowly moving towards those products that carry a higher margin for you.
Ishu Munjal: Absolutely. So currently, the FY25, FY24, yeah, we close at a top line of 99 crores. And this year we’ll be closing at a top line of 120 to 130 crores.
With the projection of closing the FY28 would be somewhere between 250 to 300 crores. All these figures are given with a very conservative approach. Walking into the D2C space attracts a margin of somewhere between 15 to 20%.
Then the Namkeen industry that the company is getting into would be attracting somewhere between 10 to 15% of PAT margins. And the already existing business would be attracting somewhere between 5 to 10% of profit margins. The company is also exploring to and are in soft talks to in a joint venture to set up a bottling plant in Delhi.
And we’ll be starting with the import of palm oil and soybean oil. Palm oil and soybean oil would be adding up a lot of revenue to the company, but the industry works on a profit margins of 4 to 5%.
So in a cumulative way, if I talk about the company’s decision to diversify into different products and category is to keep on increasing the company’s overall revenue as well as the bottom line.
So working into different spaces, working out with products which has higher margin as well as lower margins. So lower margin attracting the company with a lot of higher revenue. The higher PAT margin product is attracting higher profit for the company.
So in a just consolidated way, the company’s strategy to diversify into different products and categories will overall result in increasing top line as well as bottom line.
Mubina Kapasi: All right, super. And we spoke about product portfolio, but what about any plans to go and expand to more geographies within India, perhaps even outside India?
Ishu Munjal: There’s a lot of scope in the already existing geographical locations that the company is dealing in.
Like I told you that company is working in the entire Northern India market. And I would say in the Northern India market, the Delhi, Punjab, UP, Haryana, Uttarakhand, Himachal market is something which still has 50% more scope to put our geographical or expand our geographical distributor network among. And post once we are done and simultaneously we are working on how to start with the import business, we are also interested in opening up exports and looking for further opportunities and tapping into different geographical locations, not just based in India, but outside India as well.
Mubina Kapasi: Okay, super. I wanna hear about competition from you. I know you briefly mentioned it, but look, the fact is FMCG is very competitive.
The barriers to entry are very low. I just wanna know your thoughts on competition and what do you think of it? How are you trying to give yourself an edge?
Ishu Munjal: See, I always take competition with a positive approach. I would simply say, roti, kapda, makan ek aisi cheeze hai jiski demand badhni badhni hai.
Also, we need to understand this thing that if so many people and HNIs are wanting to get into this space, if they are interested, then there’s some scope for it, right? If somebody is not willing to put their money in this industry, then there’s no reason behind it, right? But if so many people are wanting to get into this industry, then the size is increasing, but the consumption is increasing and the population is increasing. So I take the more amount of people would be getting into it, the already existing players would be forced to do better deliveries, right? It will be allowing and forcing them to get onto more better norms and to serve better of the quality to phase of existing competition. So in an overall thing, I take the confidence in this thing that the existing players, if faced by further competition from new entrants, it will add up more value to the existing players.
And I take it very positively, yeah.
Mubina Kapasi: Okay, just a last question. We love to hear a little bit about the team at SSMD Agrotech and especially perhaps, you’ve mentioned you’ve got some ambitions for SSMD.
I would like to know who in your team, especially in the top leadership is helping you achieve those ambitions?
Ishu Munjal: Nothing would have been possible. The list can be a very lengthy one. If I’ll start naming them, I’ve already started writing my speech for the listing there and I’ve made sure that I cover all those people.
It’s not a one man show, it’s not a picture or a movie going around where one hero is fighting with all the villains alone. It’s a journey that we have had together and we are attracting more talent into the company and the company’s auditor, Mr. Prashant and then the company compliance officer, Mr. Rajesh, their strictness on me to make sure that the company is fully compliant and everything is done on time is very much required because a promoter has a lot of things to do. But if you have the right people put in the right place, then the overall journey becomes a little smooth.
A promoter making sure that TDS and GST rights and the auditing thing, by the same time, he has to also make sure the day-to-day operations are run in a very systematic way. So altogether, a promoter can’t manage everything. So the top management has been the major part in this journey and I don’t think so that it would have been possible without them.
Mubina Kapasi: All right, super. It was so great hearing you out and we wish you all the very best for your IPO and for all the aspirations you have for SSMD. Thank you so much.
Thank you so much. Okay, well, that of course was the management of SSMD Agro. Please remember, this is simply a platform to communicate and share the story of individual companies, not an investment recommendation.
Thank you so much for watching. Stay tuned to Small Cap Spotlight. All right.
Okay, Mr. Munjal, we’re all done. Thank you very much for your time, sir.
Ishu Munjal: Same here, same here. Thank you so much. Okay, bye-bye.