Shellz India BSE SME IPO Review by Dilip Davda

Shellz India Ltd. (SIL) is engaged in the manufacturing and marketing of confectionery products in India, with a diversified product portfolio comprising over 300+ SKUs across multiple categories, including Choco delights, jellies, baked treats and other confectionery formats. The company also manufactures and supplies food and bakery ingredients. It focuses on developing confectionery products at accessible price points and distributing them across a wide geographic footprint, including urban and semi-urban markets, as well as smaller towns and rural areas.

According to Ken Report, the Indian confectionery market size was INR 93.1 thousand crore in FY’25 and is projected to grow to INR 125.8 thousand crore by FY’30, at a CAGR of 6.3%. The market has demonstrated robust growth, expanding at a CAGR of 9.1% between FY’19 and FY’25, driven by rising consumer demand for affordable indulgences, increased frequency of festive consumption, and deeper penetration of packaged chocolate and sugar confectionery across both urban and rural markets. Confectionery items priced between INR 1–10 accounted for the highest purchase intent at 86%, indicating their dominant role in daily consumption patterns.

The Indian confectionery market has seen a significant transformation, driven by the shift in tastes of urban and semi-urban consumers. Small-pack, low-cost options priced under INR 10 have penetrated Tier 2/3 cities, making innovative flavors and textures more accessible. India’s economy confectionery market was valued at INR 50.5 thousand crores in FY’25, reflecting the continued relevance among price sensitive consumers, particularly in Tier 2–3 cities and rural areas. India consumed 523.0 million kg of confectionery, with a per capita consumption of 0.37 kg in FY’23, which reached 0.39 kg by FY’25, substantially lower than countries like Germany (14.4), USA (9.1), and Japan (3.2). Despite the low per capita figure, India's absolute population base is driving total consumption reaching 576 million kg in FY’25, positioning it as a high-volume yet under-penetrated market.

India’s low per capita base presents significant room for expansion, with consumption projected to rise to 0.5 kg by FY’30E, growing at a CAGR of ~4.6%. This growth is being driven by urbanization, rising incomes, a young population, and increasing access to affordable SKUs. SIL markets its consumer products under two brands, “Hugs” and “Tosca”. Under its flagship “Hugs” brand, it offers products across four categories, including baked treats, Choco delights, jellies, and panned and sugar confectionery. The “Hugs” portfolio is largely positioned at mass-market price points, with a majority of products priced at ₹10 or below.

According to the Ken Report, 68% of non-adult consumers opt for confectionery, including chocolate, at price points of ₹10 or below. Confectionery products are typically impulse-driven purchases, and sales are influenced by product availability and visibility at retail points. According to the Ken Report, 92% of grocery consumption in India continues to occur through Kirana stores. As on March 31, 2026, its products are distributed through a network of over 300 super stockists and are available across Kirana outlets in around 24 states in India. Its distribution model is focused on driving volumes through repeat purchase-driven SKUs and wide retail penetration. The company is in the highly competitive and fragmented segment.

Under our “Tosca” brand, it offers products with a relatively higher unit selling price, positioned towards mass-premium segments. The brand is currently being developed with a focus on e-commerce and quick commerce channels. The “Tosca” portfolio comprises products with differentiated formats and packaging targeted at urban consumers. The company is also expanding the “Tosca” portfolio to include products incorporating cereal-based ingredients, aligned with evolving consumer preferences for differentiated snacking options. As part of this portfolio, it formulated “Tosca Oat Choco”, an oat and cereal-based bar positioned as an alternative to traditional confectionery formats, containing approximately 33% less sugar than certain leading chocolate bars, based on internal product comparisons.

In addition to marketing and sales of consumer products under own brands, it also undertakes private label manufacturing for third-party customers. The company also exports products to international markets, including countries in the Middle East, South Asia and Europe. These channels complement its core consumer business and support diversification across customers, product formats and routes to market. As of August 31, 2026, it had 258 employees on its payroll.