Krishival Foods Board Greenlights ₹35 Crore Guarantee And ₹25 Crore Loan For 10,000 Freezers

Market snapshot: Krishival Foods' Board of Directors has approved a major financial package for its material subsidiary, Melt 'N' Mellow Foods Private Limited. The support includes a ₹35 crore corporate guarantee and a ₹25 crore direct loan earmarked for the procurement of 10,000 new deep freezers. This move represents a major strategic step in scaling the company's cold-chain infrastructure across key Indian markets.

Data Snapshot

• The board approved a corporate guarantee of ₹35 crore to support Melt 'N' Mellow Foods.
• A direct loan of ₹25 crore was greenlit for the procurement of 10,000 deep freezers.

What's Changed

• Previously, Krishival Foods had considered a ₹15 crore corporate guarantee for deep freezer leasing in July 2026, which has now been scaled to ₹35 crore alongside a direct loan of ₹25 crore.

Key Takeaways

• Krishival Foods' board approved a ₹35 crore corporate guarantee for its subsidiary Melt 'N' Mellow Foods to secure capital lease facilities.
• The parent company also greenlit a ₹25 crore direct loan to the subsidiary to fund the acquisition of 10,000 deep freezers.
• This cold-chain expansion represents a significant scale-up from the 15,490 freezers deployed by the subsidiary as of March 31, 2026.

SAHI Perspective

Krishival Foods' decision to shift capital allocation toward a direct loan and a robust corporate guarantee highlights a highly aggressive execution strategy for its ice cream segment. This infrastructure push represents a solid capital expenditure commitment of ₹25 crore for 10,000 freezers. Expanding the cold chain network is critical for the 'Melt 'N Mellow' brand to scale efficiently. This structured financing ensures the subsidiary has the liquidity to expand its physical footprint while the parent company maintains financial oversight without immediate share dilution.

Market Implications

This capacity and distribution expansion is expected to drive higher volume growth for the ice cream segment, which already experienced a 95% revenue surge in FY26. Improving last-mile delivery and product visibility at 30,000+ retail touchpoints will likely help Krishival Foods capture market share from unorganized regional competitors, especially following the recent GST reduction to 5% on ice cream.

Trading Signals

Market Bias: Bullish

The board's approval of a ₹35 crore corporate guarantee and ₹25 crore loan will enable its subsidiary Melt 'N Mellow Foods to procure 10,000 freezers, significantly expanding its cold chain distribution network which stood at 15,490 units as of March 2026.

Overweight: Packaged Foods, FMCG

Trigger Factors:

• Successful deployment of 10,000 deep freezers across key markets
• EBITDA margins ascending toward the 14-15% target at full utilization
• Volume-led top-line acceleration in the upcoming quarterly updates

Time Horizon: Medium-term (3-12 months)

Industry Context

India's organized ice cream and frozen foods industry is expanding rapidly due to rising discretionary incomes and improved logistics infrastructure. The market is highly dependent on last-mile cold storage networks, making deep freezer deployment a crucial barrier to entry. For small-to-mid cap players like Krishival Foods, scaling physical retail setups via local retail kirana stores is the primary driver of throughput.

Key Risks to Watch

• High execution risk associated with cold-chain maintenance and electricity dependency at retail endpoints.
• Exposure to raw material price fluctuations, specifically dairy fat and nuts sourcing costs.
• Seasonal sales volatility of the ice cream business segment outside peak summer months.

Recent Developments

In late August 2026, Krishival Foods scheduled board meetings to approve its annual report and finalize related party transactions. Previously on August 26, 2026, the company announced plans to use ₹35 crore of its rights issue funds to raise its stake in Melt 'N' Mellow Foods to 54.90% by September 30, 2026. However, the company has since optimized its capital strategy by focusing on structured loans and guarantees to fund immediate cold-chain expansion.

Closing Insight

By extending structured financial support to Melt 'N' Mellow, Krishival Foods is executing a disciplined infrastructure-led growth model. Investing directly in distribution assets like deep freezers represents a tangible strategy to unlock long-term margins and secure retail shelf space.

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