Shivchem Agro earmarks Rs 3.50 crore for debt repayment

Shivchem Agro Farming Inputs proposes to use Rs 3.50 crore of net IPO proceeds for repayment or prepayment of selected borrowings and applicable charges. Shivchem Agro identified Rs 5.71 crore of principal outstanding across 11 facilities as at August 12, 2026, including unsecured loans with disclosed interest rates ranging from 15.75% to 34.00%.

How much of Shivchem Agro's identified debt can the IPO repayment cover?

Shivchem Agro's Rs 3.50 crore allocation equals about 61.3% of the Rs 5.71 crore principal outstanding across the 11 facilities listed for proposed repayment or prepayment. The company may use the allocation for full or partial repayment, prepayment and repayment charges, rather than committing a specified amount to each lender. The identified facilities had aggregate sanctioned amounts of Rs 7.45 crore.

The proposed allocation does not establish that all 11 facilities will be fully repaid because prepayment charges may absorb part of the Rs 3.50 crore. Shivchem Agro says charges will depend on the outstanding principal, negotiations with bankers and the timing of repayment. The company says it will meet any differential amount from internal accruals if the required repayment and charges exceed the IPO allocation.

Shivchem Agro states that it will not reinstate, recover or otherwise restore an amount after loan reduction. However, the company also says it may take new loans for business requirements in accordance with applicable law. A lower debt balance would therefore depend on completion of the proposed repayments and on subsequent borrowing decisions.

Which Shivchem Agro loan has the highest disclosed interest rate?

Shivchem Agro's highest disclosed rate is 34.00% on an unsecured business loan from Rajsi Infin Consultants Private Limited. The loan had Rs 22.50 lakh outstanding as at August 12, 2026, a 12-instalment tenor and a 5% prepayment charge on outstanding principal. It was sanctioned on January 16, 2026.

The other eight unsecured facilities had disclosed rates from 15.75% to 18.50%. These included Rs 30.90 lakh outstanding to Poonawalla Fincorp Limited at 15.75%, Rs 32.08 lakh to Deutsche Bank at 17.00%, and Rs 25.96 lakh to Moneywise Financial Services Private Limited at 17.25%. The disclosures describe these facilities as business loans, term loans or working-capital borrowings, with several carrying 36-instalment repayment schedules.

The two secured Union Bank of India facilities carried the lowest listed rates: 9.95% on a demand cash-credit, or CC, working-capital limit and 10.45% on an 81-instalment machinery term loan. The CC limit had Rs 2.42 crore outstanding against a Rs 2.25 crore sanctioned limit, while the machinery loan had Rs 1.36 crore outstanding. Together, the secured Union Bank facilities represented Rs 3.78 crore, or about 66.2%, of the Rs 5.71 crore identified principal balance.

How do Shivchem Agro's unsecured and secured borrowings compare?

Shivchem Agro's nine unsecured facilities accounted for Rs 1.93 crore of the Rs 5.71 crore identified principal outstanding, while its two secured Union Bank facilities accounted for Rs 3.78 crore. Secured borrowing therefore formed the larger share of the listed balance, whereas unsecured facilities carried the higher disclosed interest-rate range of 15.75% to 34.00%, compared with 9.95% to 10.45% for the secured loans.

Deutsche Bank's Rs 32.08 lakh working-capital business loan was the largest unsecured balance in the list. Poonawalla Fincorp's Rs 30.90 lakh business-use loan and Moneywise Financial Services' Rs 25.96 lakh term loan were the next two largest unsecured balances. The listed prepayment provisions mean the cash needed to reduce these balances can exceed principal outstanding.

Prepayment charges range from nil for the Union Bank CC limit to charges of up to 6% under several unsecured arrangements, subject to the relevant timing conditions. Ambit Finvest Private Limited, Clix Capital Services Private Limited, Moneywise Financial Services and Poonawalla Fincorp have disclosed charges of up to 6%. Shivchem Agro says the charges are estimates and can differ at the time of repayment, making the Rs 3.50 crore proposal an allocation for both debt reduction and potential charges.

Why is Shivchem Agro using IPO proceeds for debt repayment?

Shivchem Agro says repayment or prepayment is intended to reduce outstanding indebtedness and debt-servicing costs and allow internal accruals to be used for business growth and expansion. The stated use of proceeds accompanies working-capital disclosures in which trade receivables rose to Rs 16.94 crore in FY 2025-26 from Rs 11.12 crore in FY 2024-25. Revenue from operations rose to Rs 33.82 crore from Rs 27.47 crore over the same periods.

Trade receivables increased as a proportion of revenue to 50.08% in FY 2025-26 from 40.47% in FY 2024-25. The receivables holding period rose to 151 days from 102 days. Shivchem Agro attributes higher receivables partly to distributor credit practices, under which distributors generally make payment after selling the entire lot purchased.

Trade payables rose to Rs 19.87 crore in FY 2025-26 from Rs 15.83 crore in FY 2024-25, while payable days increased to 317 from 165. Shivchem Agro attributed the change to higher procurement requirements, inventory maintained for increased business activity and the timing of supplier payments. For FY 2026-27, the company anticipates trade payables of Rs 12.70 crore and payable days of 148, stating that working-capital funds would be used for working-capital management.

Conclusion

Shivchem Agro's Rs 3.50 crore IPO debt repayment allocation is substantial relative to the Rs 5.71 crore listed principal balance, but it is not a loan-by-loan commitment to retire all identified borrowings. The listed debt combines Rs 1.93 crore of unsecured principal, including a 34.00% facility, with Rs 3.78 crore of lower-rate secured Union Bank facilities, while prepayment charges may reduce the funds available for principal repayment.

The next disclosed measure is Shivchem Agro's FY 2026-27 working-capital plan. The company anticipates receivables of Rs 20.00 crore with a 104-day holding period, finished-goods inventory of Rs 12.10 crore with 94 inventory days, and trade payables of Rs 12.70 crore with 148 payable days. The allocation of Rs 3.50 crore among principal and charges, and progress against those FY 2026-27 targets, remain the disclosed matters to watch.