🧂 At a Glance
Mishtann Foods — once a penny stock darling of YouTube “multibagger” gurus — now finds itself drowning in SEBI allegations, fake transactions, unpaid taxes, and the most bloated debtor book this side of the Yamuna. The company, once famous for selling basmati rice and Himalayan pink salt, might now be India’s “Salt Bae of Financial Shenanigans.”
🚨 Mishtann Foods Scam Deep-Dive: The Basmati That Stinks of Fraud 🚨“From Rozana Rice to Rozana Red Flags — Is Mishtann Foods Just a Saltier Goenka Realty?”
🕵️♂️ The Scam Checklist: Mishtann Ticks Every Box
Let’s just get it out there. This company makes SEBI nervous. And that’s saying something, considering SEBI allowed Brightcom to exist for 5 years too long.
Here’s what we’re dealing with:
| 🚩 Red Flag | 💣 Details |
|---|---|
| SEBI Action | ₹49.9 crore rights issue diversion, multiple fictitious transactions, and promoter ban. |
| Auditor Resignation | Statutory auditor quit post-SEBI crackdown—NEVER a good sign. |
| High Debtors | Debtor days = 307 days — means they “sell” products but never get paid. |
| Tax Dodging? | Multiple tax demands pending + qualified audit opinion. |
| Cash Flow Crisis | FY25 cash flow from operations: -₹49 crore despite ₹1,375 crore in sales. |
| Dying Promoter Confidence | Promoter holding down from 49.8% → 43.4% in just 1 year. |
🍚 But First… Who TF Are They?
Mishtann is a rice processing and FMCG company selling:
- Premium Basmati under Snowflake, Pristino
- Value brands like Rozana, Shahryar, Mahabat
- And in recent years — Salt (because salt is trending, thanks Tata)
Founded in 1981, the company suddenly found a magic wand post-Covid:
- FY22 Revenue: ₹491 Cr
- FY25 Revenue: ₹1,375 Cr
📈 That’s 180% growth in 3 years. Sounds amazing… until you realize the profit hasn’t been received, just accounted.
🧮 Financials: Looks Like Money. Smells Like Masala
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM | Cash from Ops (₹ Cr) | EPS |
|---|---|---|---|---|---|
| FY23 | 650 | 50 | 13% | -3 | ₹0.48 |
| FY24 | 1,288 | 346 | 28% | -54 | ₹3.26 |
| FY25 | 1,375 | 333 | 25% | -49 | ₹3.09 |
🤯 Translation:
They claimed to earn ₹333 Cr net profit in FY25, yet burned ₹49 Cr in cash. How? Because the money never arrived. It’s all in phantom receivables.
- Receivables = ₹1,163 Cr in FY25
- Sales = ₹1,375 Cr
🧂 ~84% of annual revenue is stuck as “some guy will pay later”
🧾 Audit Opinion = “Bro, This Is Sus”
🧑💼 Auditor’s Words (Paraphrased):
- “We don’t know if this revenue is real.”
- “We don’t know if these customers exist.”
- “We think ₹49.9 Cr of funds raised were misused.”
- “Also, we’re leaving. BYE.”
SEBI concurs. In its May 2025 order, it banned the promoters, slapped fines, and alleged round-tripping, misstatements, and misuse of public funds.
👎 Even the annual report is a work of fiction.
- Claims of Himalayan pink salt sales in US/EU = zero disclosures
- Capex? Virtually non-existent
- Plants? “Processing units” without real fixed assets
- Marketing? Invisible
- Salt margins? 🧂Miraculously 25%+
📉 Stock Performance = Bubble Then Trouble
| Period | Price | Return |
|---|---|---|
| Jan 2022 | ₹2.8 | – |
| Nov 2022 | ₹19.0 | 🤑 +578% |
| Jun 2025 | ₹6.45 | 💀 -66% |
Between 2021 and 2022, YouTubers and Telegram “gurus” pumped Mishtann hard. The company obliged by announcing things like:
- “New Gujarat salt plant”
- “Export expansion”
- “Blockchain-based rice tracking” (just kidding… not yet)
But it all crashed with the SEBI hammer.
💸 Valuation? The Scam Is Cheap — But Still Overpriced
Let’s assume Mishtann is not a scam (lol):
- FY25 PAT: ₹333 Cr
- Shares Outstanding: ~108 Cr
- EPS = ₹3.09
- CMP = ₹6.45
- P/E = 2.09
Looks like a deep value bargain, right? But now let’s factor reality:
🧮 Realistic FV Calculation (Assuming 50% profit haircut and normal working capital cycle):
| Metric | Assumption |
|---|---|
| Real PAT | ₹170 Cr (after removing suspicious entries & working capital fudge) |
| Fair P/E | 8× (for small FMCG with rice dependency + audit risk) |
| Fair Market Cap | ₹1,360 Cr |
| Shares | 108 Cr |
| ⚖️ Fair Value | ₹12.5/share |
But if we apply serious red flag discount (like Brightcom level):
| Realistic FV Range | ₹3 to ₹6 per share |
➡️ So ironically, current price ₹6.45 is near upper edge of even our worst-case valuation.
🪜 Shareholding — Promoter Exodus While Retail Gets Trapped
| Period | Promoter Holding | Public Holding | No. of Shareholders |
|---|---|---|---|
| Jun 2023 | 49.8% | 48.6% | 1.17 lakh |
| Mar 2025 | 43.4% | 55.1% | 4.72 lakh |
👎 Retail investor base 4x’d in 2 years
👎 Promoters sold ₹80-90 Cr worth of shares quietly
👎 FIIs appeared briefly, then vanished
Basically, exit through the gift shop.
🤡 Key Management? Mostly AWOL
- CMD: Hiteshkumar Patel (promoter banned by SEBI)
- CFO: Resigned. Multiple changes.
- Auditors: Resigned.
- Company Secretary: Name changes like a Tinder profile.
Let’s just say, no one wants their LinkedIn associated with this.
🥲 Final Thoughts: The Rice Is Nice, But This Chart Is Cooked
Mishtann was a textbook pump-and-dump:
- High revenue growth with no operating cash flow
- Sky-high debtors and working capital cycles
- Rights issue money misused
- Promoters selling during bull run
- Qualified audit opinions
- SEBI banning top management
And yet, it’s still being pitched in retail circles as “low P/E FMCG growth story.”
🧂 Reminder: A low P/E is meaningless if your E = Exaggerated.
📌 TL;DR
- SEBI says scam. Auditor says scam. Balance sheet says scam.
- Promoters dumped 6% stake. Retail got left holding stale rice.
- Valuation looks cheap, but even ₹6 may be overpriced.
🧠 EduInvesting Verdict: 🚫 Avoid Like Day-Old Curd
Unless you’re collecting case studies in How to Smell a Scam Before It Burns Your Portfolios, Mishtann Foods is NOT a bet — it’s a bait.
✍️ Written by Prashant | 📅 18 June 2025
Tags: Mishtann Foods, SEBI Scam, Penny Stock Pump, Rice Company Fraud, Retail Trap, FMCG Red Flags, Basmati Bubble, Audit Fraud, Scam Stocks India
