Kabira Handmad
Initial Ask – Rs.1 Cr. for 5% equity at a valuation of Rs.20 Cr.
About the Company
The organic food vertical of Manishankar Oils (parent company), Kabira Handmad deals in all the daily use food items, which are wholly organic, natural and traditionally made. Manishankar oils dealt with just oil (odourless), whereas Kabira Handmad is a new initiative in the segment of cereal, spices, flour and diary products. They operate both by manufacturing themselves and third-party manufacturing. They had to take up competitive prices during the pandemic, which led to shrinked margins. Another reason for their low margins is the several number of middlemen in the distribution process. This is the reason they want to carry out D2C business now.
One of the most distinguishing features of their business is the 5-10% area allocation to martyrs in the packaging of their products.
Past performance of the Company
Manishankar Oils made a revenue of around Rs.160 Cr. in the financial year of 2020-21. Of this amount, Kabira Handmad contributed around Rs. 3 Cr. They reached these numbers after bagging sales of Rs.42 Cr. and Rs.72 Cr. in the financial years 2018 and 2019 respectively.
However, they have a low gross margin of 3-4.5% and a net margin of 1-2%.
Industry Overview
The industry of organic foods has been surging mainly on account of Covid, which has made people conscious of their health awareness. The fact that they’ve started giving more attention to the nutritious quality of their intake is helping this sector rise at a projected CAGR of 24%. This, coupled with strict government regulations is working out well for the sector.
While being regarded as a niche sector till now, this market is expected to see wider penetration over the years. Use of e-commerce in this field can change the dynamics of the business carried out by this company, making it a highly profitable one.
Offers made, and the one accepted:
Anupam Mittal was the only one to make an offer: 25 lacs for 10% of equity along with 75 lacs as debt. His offer was not for investment in Kabira Handmad, but he in Manishankar Oils. However, it was not accepted by the founders.