HyFun Foods Plans Up To Rs 2,000-Crore IPO As Frozen Food Demand Surges

Frozen potato products manufacturer and key quick-service restaurant (QSR) supplier HyFun Foods is laying the groundwork for an initial public offering (IPO) expected to be in the range of Rs 1,500 crore to Rs 2,000 crore. The public listing aims to support the company’s capital expenditure and aggressive capacity addition amid surging domestic and international demand for ready-to-cook food products.

The Gujarat-headquartered company, which supplies frozen French fries and potato specialities to global fast-food majors such as McDonald’s, KFC, and Burger King, may explore a private equity fundraise as an interim stepping stone before tapping the primary markets.

Robust Revenue Trajectory and Capex Drive

HyFun Foods is targeting approximately Rs 1,500 crore to Rs 1,600 crore in sales revenue for the current fiscal year. The company has outlined an ambitious long-term roadmap to scale its top-line to Rs 5,000 crore by FY28–FY29, driven by plant modernisations and expanded market penetration.

To support this volume growth, the company is undertaking a phased capital expenditure program of roughly Rs 1,500 crore:

• Mehsana Facility: Setting up a greenfield manufacturing unit near Ahmedabad in Mehsana, Gujarat, with an estimated investment of around Rs 1,000 crore.
• Madhya Pradesh Expansion: Establishing a subsequent greenfield processing unit with an outlay of approximately Rs 500 crore.
• Capacity Increase: Expanding total French fries production capacity to 2,45,000 tonnes annually, alongside increasing potato speciality lines to 40,000 tonnes.

The ongoing investments are being funded via a mix of internal accruals and bank debt prior to the anticipated market float.

Changing Business Mix and Domestic Demand

Historically, HyFun Foods has relied heavily on overseas business, with exports accounting for around 70% of total sales across more than 40 destination countries spanning Southeast Asia, the Middle East, and the Far East. In international markets, India has steadily gained traction as a cost-effective and dependable alternative supplier compared to traditional processors in Europe and North America.

However, the company’s domestic footprint is shifting rapidly. Currently, the company's revenue divides into:

• Quick-Service Restaurants (QSRs): 40% of sales.
• Hotels, Restaurants, and Catering (HoReCa): 40% of sales.
• Consumer Retail: 20% under the HyFun retail brand.

Management expects domestic market consumption to increase from 30% to nearly 50% of total revenue over the coming years. This shift is propelled by rapid urbanisation, demand for convenience foods, quick-commerce penetration, and supportive tax policies such as goods and services tax (GST) rationalisation on processed food items.

Upstream Integration Via Contract Farming

To insulate its operations from raw potato price volatility and secure consistent quality for processing-grade varieties, HyFun operates a seed-to-shelf model through its agribusiness arm, HyFarm. HyFarm currently engages with thousands of farmers across Gujarat, Madhya Pradesh, and Uttar Pradesh under pre-agreed buyback arrangements. Over the next few years, the firm aims to expand its procurement network to 30,000 contract farmers, targeting annual potato procurement of 1 million metric tonnes.

For Indian stock market participants, HyFun’s prospective listing represents an emerging avenue to capture value in the agricultural value chain, contract farming, and consumer-facing food processing industries.

Tags: HyFun Foods IPO FMCG Sector QSR Industry SEBI Food Processing