HyFun Foods Plans USD 108 Million Expansion in North Gujarat as Export Growth Drives IPO Plans

HyFun Foods is investing INR 900 crore (USD 108 million) in a new manufacturing facility in North Gujarat, expected to be ready by late 2026. This expansion will more than double its French fries capacity to 245,000 tonnes and potato specialties capacity to 40,000 tonnes.

Overall, the company’s total potato processing capacity will grow from 350,000 tonnes to about 700,000 tonnes. The new unit will become HyFun Foods sixth plant, complementing its existing operations in Mehsana. Production from the new capacity is expected to begin with the January 2027 harvest.

HyFun Foods reported revenue of INR 1,350 crore (USD 162 million) in FY25 and expects about INR 1,500 crore (USD 180 million) this fiscal year. With the additional capacity, the company targets revenue of INR 3,500 crore (USD 420 million) by FY28. 
 

Exports drive growth and farmer network expansion

Exports remain a major growth driver for HyFun Foods, accounting for around 70% of FY25 revenue and an estimated INR 1,100 crore (USD 132 million) this fiscal year. Key export markets include Southeast Asia, the Far East, and GCC countries.

The company also supplies hash browns to Walmart in the United States. To meet rising demand, HyFun Foods plans to expand its contract farming network from 7,000 farmers across Gujarat and Madhya Pradesh to between 12,000 and 15,000 farmers for the upcoming season.

Currently, about 8–10% of potato procurement comes from Madhya Pradesh. The company plans its next major expansion in the state within the next 1 to 1.5 years and is also evaluating entry into Uttar Pradesh over the next five years. This seed-to-shelf model helps maintain product quality and supply chain efficiency. 
 

IPO plans and industry outlook

HyFun Foods is preparing for a public listing, with IPO preparations expected to begin by the end of FY27 and a potential launch in 2028–29. The funds raised will support further expansion, including new processing facilities in Madhya Pradesh and Uttar Pradesh, and possible diversification into onion processing.

India’s potato processing sector is currently growing at around 15–20% annually, while HyFun Foods has achieved growth of 30–35% over the past decade. Globally, the French fries market is forecast to grow at a compound annual rate of about 5.95% from 2026 to 2034, reaching USD 29.98 billion.

Asia’s frozen potato products market is also expected to expand steadily through 2035. In India, the frozen potato products market is projected to grow at 9.49% annually between 2026 and 2034, reaching approximately USD 4.5 billion. Supportive government policies, including GST reductions on processed foods, further strengthen the sector’s outlook. 
 

Challenges and risks

Despite strong growth prospects, HyFun Foods faces several challenges. Heavy reliance on export markets exposes the company to currency fluctuations, geopolitical risks and changes in trade policies.

Scaling the contract farming network to up to 15,000 farmers also increases operational complexity and requires strong management systems. Delays in capacity expansion or sourcing challenges could impact production targets.

Competition from global and domestic processors such as McCain Foods and Iscon Balaji Foods also requires continuous innovation and efficiency improvements. In addition, supply chain disruptions, including adverse weather affecting potato yields, remain a potential risk for the sector. 
 

Outlook

HyFun Foods expansion strategy and planned IPO reflect strong confidence in the company’s long-term growth potential. With new capacity expected to become operational from the January 2027 harvest, the company aims to significantly increase production and move toward its FY28 revenue target.

The planned IPO is expected to provide additional capital for further domestic and international expansion, helping HyFun Foods strengthen its position in the global frozen potato products market.