- Cut the capsicum and remove the seeds. Fry the peanuts, red chillies, half of the chopped onions and coriander seeds in a pan, grind it to form a paste. Fry The Onion & Capsicum Heat oil in a pan, then fry the remaining onions. Add capsicum and salt, stir fry on low flame for about 15 minutes. Add The Peanut Paste & Let It Cook Add the peanut paste, cook for about five minutes and add chopped coriander leaves. Serve your capsicum masala hot!