The Zagreb Stock Exchange is having a surprisingly dynamic year. Just three months after ING-GRAD’s public debut, a new listing hits the board; this time, it’s Žito Group stepping into the spotlight. In today’s brief, we unpack the key highlights of the IPO itself, followed by a brief look at the company behind it. It’s rare to see back-to-back IPOs like this in our market, and frankly, it’s a welcome change of pace.

IPO Information

Firstly, let’s dive into the structure and mechanics of the Žito IPO. The Company is offering a total of 6,651,920 shares with a nominal value of EUR 1 per share. The structure includes 4,371,535 newly issued shares through a capital increase, 1,000,000 treasury shares currently held by the Company, and 1,280,385 shares being sold by the two major shareholders, Marko Pipunić and Marijana Majić Pipunić. Combined, the offering represents over 25 percent of the Company’s total share capital plus one share.

The offering is open to three categories of investors, all located within the Republic of Croatia: employees of Žito Group, retail investors, and qualified investors. The minimum investment for small investors and employees is set at EUR 300.00. Qualified investors must meet the criteria defined by Croatian capital market regulations.

To participate, investors must submit a completed subscription form, indicating the total amount in EUR they wish to invest. The number of shares allocated will depend on the final IPO price, which will be determined by the Management Board of Žito d.d., based on the proposal of the Advisory Committee, following the bookbuilding process. Payment of the declared amount must be completed by the specified deadline.

The IPO will be considered successful if at least 6,401,920 shares are subscribed. In the case of oversubscription, allocation will be made according to rules defined in the allocation policy, with priority given to employees, followed by small investors, and lastly to qualified investors. In such cases, investors may receive fewer shares than requested. Excess funds will be refunded within seven working days after allocation.

Based on the indicated price range, the implied EV/EBITDA multiple before the cash inflow stands between 6.9x and 8.0x, calculated on the normalized adjusted EBITDA. If the IPO is successful, the company could secure between EUR 94.7m and EUR 112.7m in fresh capital, which would remain within the company and be used to finance its investment plans.

Žito Group IPO timeline

Source: Žito Group

Employee Benefits

Žito Group has introduced a dedicated incentive scheme to encourage long-term shareholding among its employees. As part of the IPO, all employees who acquire shares through the offering and retain them continuously for a period of 3 years will be entitled to receive 1 bonus share for every 4 shares held, free of charge. This benefit applies to up to 2,500 shares per employee, meaning the maximum number of bonus shares a single employee can receive is 625 shares.

Participation in the incentive scheme is automatic for employees who subscribe through the designated tranche and comply with the holding period. The bonus shares will be transferred after the three-year period, provided the employee remains the holder of the initially subscribed shares throughout. Additionally, in the case of oversubscription, allocation priority will be granted to employees, especially within this 2,500-share limit, to ensure broad access to the incentive.

This loyalty mechanism not only reinforces internal ownership but also aims to align employee interests with the Company’s long-term growth and post-IPO performance.

IPO Proceeds Deployment

Žito Group plans to deploy IPO proceeds across a broad set of investment initiatives totalling EUR 125m, with a strategic focus on increasing production capacity, improving energy efficiency, and reinforcing its vertically integrated model. The allocation is diversified across key operational areas, aiming to drive long-term productivity, resilience, and cost optimization:

• Pig farming (EUR 31m): Investments will target the construction and reconstruction of pig farms to raise total production capacity by 90,000 units annually, bringing the Group’s total to 265,000 pigs per year. The projects also include the introduction of advanced technologies, automation, and biosafety measures.
• Animal welfare (EUR 7m): Funds will support the reconstruction of egg production farms, facilitating a shift toward cage-free laying hens. While production volumes remain stable, changes in production methods are expected to support premium pricing. Additionally, ventilation systems on dairy farms will be upgraded to support milk yield growth.
• Irrigation infrastructure (EUR 10m): Investments will focus on irrigation equipment for six arable units, mitigating drought risk and enabling two harvest cycles per year, depending on crop rotation and climate conditions. The targeted expansion covers an additional 2,700 hectares of arable land.
• Green energy (EUR 18m): The company plans to install photovoltaic and battery systems across several locations (e.g., TSH, TUČ, and MEI) to secure long-term energy cost stability and enhance energy efficiency. Total planned output includes 14 MW of additional electricity capacity.
• Meat processing (EUR 9m): Expansion of production capacities across the meat value chain.
• TUČ facility reconstruction (EUR 8m): Modernization of processing infrastructure.
• Feed and silo capacity expansion (EUR 12m): Investments into TSH and related storage systems.
• M&A in food and agri-sector (EUR 30m): Žito is also reserving capital for opportunistic acquisitions aligned with its core verticals.

This capital allocation strategy is designed to reinforce the Group’s core strengths in vertical integration, self-sufficiency, and operational control, while addressing structural challenges such as labor shortages, input price volatility, and environmental sustainability.

Company information

Žito Group is a leading agri-food company in Croatia and the broader Southeast European region, operating across crop farming, animal husbandry, food processing, energy production, and trade. The company emphasizes domestic raw material sourcing, technological advancement, and sustainability, ensuring traceability and quality control from the field to the final product.

Žito manages over 18,800 hectares of agricultural land under long-term state concessions, with an additional 6,000 hectares operated by third-party producers. It produces more than 300,000 tonnes of cereals, oilseeds, and industrial crops annually, supplying internal feed and food operations, with surplus production marketed domestically and internationally. The company is Croatia’s largest oilseed processor.

In livestock, Žito is the second-largest pig producer in the country, with ten farms covering the entire production cycle. It also leads in fresh egg production with over 130 million eggs per year, sold under its consumer brand. Dairy and cattle farming support its meat and processed food segments.

Žito has invested in automation, precision agriculture, and energy efficiency, including four biogas plants converting organic waste into energy. This broad scope and operational integration support cost control and reduce vulnerability to external shocks.

Financially, from 2022 to 2024, Adj. Revenue declined from EUR 421m to EUR 362m and then to EUR 335.1m, primarily due to global commodity price normalization and the exit from the milling segment. Roughly two-thirds of revenue comes from the domestic market. Pricing is highly influenced by international commodity trends, especially in crops and feed.

Key historical financials (2022-2024, EURm)

Source: Žito Group, InterCapital Research

Adjusted EBITDA remained stable despite the topline decline, reaching EUR 66.3m in 2024 with a margin of 20%. Segment-wise, EBITDA contribution came from crop farming and trade (39%), animal husbandry (33%), and food processing (28%). Net income in 2024 amounted to EUR 25m, reflecting improved operational performance and the removal of prior-year noise from associate results.

Over the 2022–2024 period, Žito invested more than EUR 100m in expansion and modernization projects. Key investments included the construction of the Orlovnjak piglet farm (EUR 7.9m), modernization of the oil plant in Čepin (EUR 5m), and the Vuka laying hen farm (EUR 2.8m), as well as the acquisition of MI Ravlić, a major Croatian meat producer. In parallel, the development of the EUR 22.7m Materra hotel project diversified asset use. For the 2025–2027 period, Žito has planned additional growth investments totaling EUR 105m, focused on expanding core production capacities, irrigation infrastructure, and further vertical integration. Several of these projects are co-financed through EU and national support schemes.

All in all, this IPO represents a refreshing and much-needed development for the Croatian capital market. Žito is a large, established company rooted in the heart of domestic agriculture and food production, with deep operational ties across Slavonia. The company has laid out a concrete plan for deploying the IPO proceeds across strategic projects and potential acquisitions, offering investors visibility into its next growth phase. As one of the most significant listings since ING-GRAD, this transaction sets a positive precedent and raises hopes for more listings of real-sector companies going forward. We wish Žito Group a successful offering and a stable start to life as a public company.