Functional and Innovative Foods receives SEBI nod to go ahead with IPO plans

As per the latest business developments, Tamil Nadu-based food contract manufacturing firm Functional and Innovative Foods has received approval from the capital markets regulator Securities and Exchange Board of India (SEBI) to proceed with its proposed initial public offering (IPO).

The firm had filed its draft red herring prospectus (DRHP) with SEBI in June 2026 to mobilize funds through an IPO.

SEBI approved the firm's IPO papers by issuing observations on the draft document on September 25.

The issuance of observations means the firm can launch its IPO within the next one year.

Functional and Innovative Foods, which operates on a business-to-business model and primarily caters to customers through private-label manufacturing arrangements, has proposed to mobilize funds through a public offering of 85 lakh shares. This comprises a fresh offering of 60 lakh shares and an offer for sale (OFS) of 25 lakh shares by promoter Senthil Kumar Chinnusamy.

The firm has proposed to utilise Rs 17.3 crore and Rs 19.6 crore from the net proceeds of the fresh offering to set up new manufacturing units at Namakkal in Tamil Nadu (Unit V) for sprouted and fortified products, and Dhar in Madhya Pradesh (Unit VI) for manufacturing its existing product portfolio, respectively.

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Further, Rs 30 crore will be used to repay debt availed by the firm and its subsidiary, Christy Quality Foods (India), while Rs 15 crore will be utilised for long-term working capital requirements. The remaining proceeds will be used for general corporate purposes.

With four manufacturing units comprising nine facilities in Tamil Nadu, Functional and Innovative Foods offers ready-to-eat (RTE) and ready-to-cook (RTC) products, staples, sugar alternatives, spices and other allied FMCG products.

Its customers include Wholsum Foods (Slurrp Farm), Fitshit Health Solutions (The Whole Truth), Istore Direct Trading (Urban Platter), Innovative Retail Concepts (BigBasket), Minkan Agro Industries (Millet Bank), as well as multinational FMCG firms such as Kellogg India and Marico.

For the nine-month period ended December 2025, the private-label manufacturing business contributed 66.87 percent of the firm's topline from operations.

Beeline Capital Advisors has been appointed as the merchant banker for managing the Functional and Innovative Foods IPO.