New Delhi, July 15 -- Sauces and condiments maker Veeba Food is in talks with potential investors to raise funding ahead of a planned initial public offering that it could float by the end of this year, three people aware of the development told VCCircle.

Veeba, owned and operated by VRB Consumer Products Pvt Ltd, is likely to file its draft red herring prospectus (DRHP) in two to three months' time, the people said, asking not to be named. The pre-IPO round would provide a valuation benchmark for the company before it hits the capital market, they said.

"Bankers and lawyers are working on it and the [DRHP] filing should happen five to six weeks after the pre-IPO round is concluded. The aim is to target listing by year-end," one of the persons mentioned above said.

The company has appointed Axis Capital, Motilal Oswal Financial and Jefferies to work on the IPO process.

The second person said that the trio of investment bankers is also helping the company navigate the pre-IPO round. "The company is in talks to raise anywhere between $50 million and $80 million (Rs 480-770 crore), consisting of primary and secondary components. While conversations are ongoing with multiple investors, a Singapore-based entity, which already has a large presence in the country, is likely to write the cheque for the round," he said.

The company's existing investors include Belgian investment firm Verlinvest, and venture capital firms DSG Consumer Partners and Saama Capital.

The third person cited above said Veeba is looking for an investor that will stay with the company even after listing and not divest after the six-month lock-in period. "It is looking at a deeper sort of strategic tie-up as against just a financial partner," he said.

Valuation, financials

The people cited above said Veeba's IPO could raise about $200 million and could involve both a fresh issue of shares as well as an offer for sale by existing investors. Bloomberg first reported the company's IPO plan in March.

A Veeba spokesperson was not available for comment for this article.

The people also said the company is aiming for a 10-15% bump in valuation in the IPO from the current level. The company's current valuation could not be ascertained. However, VCCircle estimates show the company was valued around Rs 2,600-2,700 crore in 2024 when Belgian investment firm Verlinvest increased its exposure to Veeba by buying part of the stake held by DSG Consumer.

Verlinvest, which focuses on consumer as a theme for both its direct venture capital and private equity-style transactions as also its commitments to third-party managed funds, first invested in Veeba in 2016 as part of the company's Series B financing. It invested another Rs 40 crore in 2019, valuing the company at around Rs 1,400 crore, or about $200 million then.

Among Veeba's peer group companies, Capital Foods was acquired by Tata Consumer at a 7x revenue multiple in early 2024, although the valuation by a strategic buyer tends to be higher. Another food company, Orkla India, went public last year with an asking valuation of about Rs 10,000 crore. It currently commands a market capitalisation of Rs 8,000 crore at a 3.2x multiple of FY26 revenue. Veeba's FY27 sales could be in the range of Rs 1,200-1,500 crore and it could aim for a revenue multiple of 4-6x in its IPO. That would translate into a valuation of anywhere between Rs 4,800 crore and Rs 9,000 crore.

Veeba was spun out as a separate business in 2013 from Viraj Bahl's family enterprise Fun Food, which was sold to German group Oetker. The brand offers ketchups, mayonnaise, oriental sauces, and dressings.

The company has a footprint in over 700 cities with a diverse portfolio of over 300 products, as per its website. It posted revenue from operations of Rs 1,019 crore during FY25, up from Rs 876 crore the year before. Its net profit fell to Rs 5.8 crore in FY25 from Rs 28.8 crore in the preceding year, as per VCCEdge.

Published by HT Digital Content Services with permission from VC Circle.