Peshwa Wheat Limited plans 83% capacity rise, orders unplaced

Peshwa Wheat Limited plans to increase flour-processing capacity by 46,500 metric tonnes per annum, or 83%, to 102,600 metric tonnes per annum from 56,100 metric tonnes per annum. The proposal follows FY 2025-26 utilisation of 50,546 metric tonnes, but machinery and construction orders had not been placed when the Red Herring Prospectus was issued.

How large is Peshwa Wheat’s proposed capacity expansion?

Peshwa Wheat proposes to take installed processing capacity to 102,600 MTPA, meaning metric tonnes per annum, by adding 46,500 MTPA at its Bijepur, Indore facility in Madhya Pradesh. A Chartered Engineer’s certificate dated June 24, 2026 records existing installed capacity of 56,100 MTPA and FY 2025-26 utilised capacity of 50,546 MTPA; the proposed increment was certified on November 20, 2025.

The planned increase equals 82.9% of the current 56,100-MTPA base, while FY 2025-26 production represented about 90.1% utilisation of existing capacity. Peshwa Wheat processes atta, or wheat flour, Sortex wheat, broken wheat, gram flour and maize flour, and sells largely business-to-business in Madhya Pradesh, Maharashtra, Karnataka and Gujarat through super stockists, wholesalers and bulk customers. The expansion is intended to serve existing customers and larger customers from the same Indore location.

Peshwa Wheat’s ability to use the additional capacity will depend on machinery installation, construction completion, wheat procurement and sales growth. Its working-capital forecast assumes inventory days will rise from 57 days in FY 2025-26 to 70 days in FY 2026-27, partly because it intends to increase capacity and hold more raw material and finished goods. Wheat is a seasonal Rabi crop, with procurement concentrated from January to mid-April, which increases inventory funding requirements.

What will Peshwa Wheat spend to add the new capacity?

Peshwa Wheat estimates the total machinery-project cost at Rs 10.0011 crore, including goods and services tax, or GST, and expects Rs 6.6909 crore to be funded from issue proceeds. The machinery quotation from Haarish Equipments Private Limited, dated May 14, 2026, covers cleaning, atta chakki milling, packing, mechanical erection, electrical systems and automation.

The gross machinery estimate consists of Rs 8.2755 crore of basic equipment and services, Rs 0.20 crore of packing and forwarding, and Rs 1.5256 crore of GST. The funding plan subtracts a tentative Rs 3.3102 crore state capital-expenditure subsidy, leaving Rs 6.6909 crore as the estimated immediate cost to be funded from issue proceeds. Peshwa Wheat says it may obtain input tax credit, or ITC, on GST after payment, subject to GST-law compliance and matching conditions; any ITC availed would be used in normal operations.

The project also needs a vertical expansion because the ground-floor facility lacks space for all proposed machinery. The site covers 990 square metres, with current built-up area of 520.42 square metres and only 73.58 square metres of free area. Peshwa Wheat plans to construct first and second floors of 520.42 square metres each, increasing total built-up area to 1,561.26 square metres. The civil-construction estimate is Rs 5.012 crore, comprising Rs 2.612 crore of materials, including GST, and Rs 2.40 crore of labour and contractor services.

Why are Peshwa Wheat’s expansion costs and timing not fixed?

Peshwa Wheat had not placed orders for either machinery or civil construction at the date of the Red Herring Prospectus. The machinery quotation was valid for 120 days from May 14, 2026, and projected supply five to six months after advance payment. Peshwa Wheat says it has no definitive agreement with Haarish Equipments Private Limited and has not previously procured equipment or conducted transactions with that supplier.

The civil plan likewise rests on estimates rather than placed orders. New Heena Enterprises provided a Rs 2.612 crore material estimate dated May 14, 2026, valid for four months, while Saras Construction supplied a Rs 2.40 crore labour-and-contractor estimate dated May 15, 2026, also valid for four months. Material delivery was estimated at up to two days after order confirmation, while construction was expected to take up to three months after confirmation. Neither supplier nor contractor was stated to be connected with promoters, directors, senior management, key managerial personnel or the merchant banker.

Peshwa Wheat’s disclosed schedule calls for construction to start in October 2026 and finish in November 2026. It expects to place machinery orders in October 2026, receive and install machinery in February 2027, and begin commercial production in February 2027. These milestones depend on order placement, supplier performance and project costs remaining within estimates. Peshwa Wheat states that expired quotations could result in cost escalation, with additional costs to be met from internal accruals; it may also change suppliers or modify the machinery scope.

How certain is Peshwa Wheat’s proposed state subsidy?

Peshwa Wheat’s Rs 3.3102 crore subsidy is an estimate, not a received or applied-for incentive. Peshwa Wheat bases the figure on the Madhya Pradesh MSME Development Policy 2025, effective from February 24, 2025, under which it calculates assistance at 40% of eligible capital expenditure. Of the Rs 10.0011 crore total machinery estimate, Rs 8.2755 crore is stated to be eligible capital expenditure, while Rs 0.20 crore of packing and forwarding and Rs 1.5256 crore of GST are not eligible.

Peshwa Wheat plans to apply only after machinery installation and expects to do so in February 2027. If approved, the assistance would be disbursed in seven equal annual instalments rather than as an upfront receipt. The applicable first commercial-operation year depends on whether production starts on or before September 30; a unit commencing later may select the current or subsequent year as its base year.

The funding structure therefore requires Peshwa Wheat to provide the Rs 3.3102 crore amount through internal accruals or external borrowings if the subsidy is not received. This is separate from the stated Rs 6.6909 crore machinery funding from issue proceeds. The prospectus also says its project estimates were prepared by management and were not appraised by a bank or financial institution, although the board approved the proposed deployment on August 5, 2026.

Conclusion

Peshwa Wheat’s planned 46,500-MTPA addition is substantial relative to its 56,100-MTPA installed base and follows FY 2025-26 utilisation of 50,546 MTPA. The project combines Rs 6.6909 crore of proposed issue funding for machinery with Rs 5.012 crore for civil construction, while the capacity plan also requires more inventory and receivables funding as production and distribution increase.

The next disclosed milestones are October 2026 order placement and construction commencement, November 2026 construction completion, and February 2027 machinery installation, commercial production and intended subsidy application. Whether the project reaches 102,600 MTPA on that timetable depends on unplaced orders, supplier quotations, construction execution and the eventual treatment of the estimated Rs 3.3102 crore subsidy.