It’s often said that you should choose the timing of your business, not the idea.

In 2004, just before he founded Sresta Natural Bioproducts, Rajashekar Reddy Seelam and a friend did some modest market research. It showed that “he’d be a fool” to start an organic foods business.

He started one, nonetheless.

Owner of 24 Mantra, one of the largest organic (packaged) food brands in India, if not the largest, Sresta got the market regulator’s approval for its initial public offering (IPO) in March. The company is raising Rs 500 crore ($64.3 million), of which Rs 450 crore (~$58 million) will go to investors selling their shares through an Offer for Sale. But like many other companies with Sebi approvals today, Sresta is waiting out the market volatility.

Talk of timing.

After a slow, arduous journey that has led to a network of farmers 35,000-strong across 12 states, Raj Seelam’s 18-year-old organic bet is at the centre of a raging debate. One that spans food security, a rising fertiliser import bill, increasing health consciousness, and a changing climate that is making farming riskier.

And in the midst of a food shortage crisis in neighbouring Sri Lanka, which many wrongly attribute wrongly attribute Down To Earth Sri Lanka’s organic farming crisis: Learning from failures Read more to organic farming as a whole, India’s prime minister is putting his weight his weight News18 Organic Farming is the New Mantra, Progressive Gujarat Farmers Have Already Adopted It: PM Modi Read more behind organic farming adoption. Other government agencies are rolling out specifics to ensure that a move away from imported fertilisers to organic fertilisers is not kneejerk.

Until now, 24 Mantra has been a lone evangelist for organic products. Raj Seelam’s principled choice of not selling “anything” to the farmer to avoid conflict of interest has also meant no crazy growth for this VC-backed company. Some of that may be up for change.

Amul, the flagship brand of India’s largest food products marketing organisation, launched its organic staples line last week. More competition, more awareness, and more market expansion.

Timing, you see.

In May, 24 Mantra began rolling out farm-to-fork traceability for its packets—a QR code that takes a consumer into a product and grower wonderland. Raj Seelam believes that although quality was always the key at Sresta, he can now give what organic product buyers always want in addition: assurance.

Let’s dive into the interview.

Q. Let’s start with the IPO. Your draft red herring prospectus (DRHP) says that out of the Rs 500 crore that you want to raise, only Rs 50 crore (~$6.4 million) is for the company; of which about Rs 32 crore (~$4.1 million) is to meet the working capital requirement.

AUTHOR

Seema Singh

Seema has over two decades of experience in journalism. Before starting The Ken, Seema wrote “Myth Breaker: Kiran Mazumdar-Shaw and the Story of Indian Biotech”, published by HarperCollins in May 2016. Prior to that, she was a senior editor and bureau chief for Bangalore with Forbes India, and before that she wrote for Mint. Seema has written for numerous international publications like IEEE-Spectrum, New Scientist, Cell and Newsweek. Seema is a Knight Science Journalism Fellow from the Massachusetts Institute of Technology and a MacArthur Foundation Research Grantee.

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