Ramdevbaba Solvent Limited IPO

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This business operates in a specialized and essential sector of the agribusiness and food production industry, focusing on the manufacturing, distribution, marketing, and sale of Physically Refined Rice Bran Oil. This comprehensive overview will break down the key components of their business model, emphasizing its strategic position within the market and its alignment with consumer health trends and sustainable practices.

Core Products and Services

Rice Bran Oil Production and Sales
  • Primary Product: Thier flagship offering is Physically Refined Rice Bran Oil, extracted from the bran of rice grains. This product stands out in the market for its high smoke point and nutritional profile, making it a preferred choice for both households and food service providers for high-temperature cooking.
  • Client Base: They serve a broad spectrum of clients, including major FMCG companies such as Mother Dairy Fruit & Vegetable Private Limited, Marico Limited, and Empire Spices and Foods Ltd. This diversification underscores the quality and reliability of their product, facilitating stable business relationships.
  • Own Brands: The business has successfully launched its own brands, “Tulsi” and “Sehat”, to penetrate the retail market directly. These brands are distributed through a network of thirty-eight distributors across Maharashtra, ensuring widespread availability to end consumers.
By-Products Utilization
  • De-oiled Rice Bran (DORB): The production of Rice Bran Oil yields DORB as a significant by-product, which they repurpose as a high-nutrient feed for cattle, poultry, and fish. This not only demonstrates a commitment to sustainable practices but also allows the business to tap into the lucrative animal feed market across several Indian states.
  • Other By-Products: The sale of fatty acids, lecithin, gums, spent earth, and wax in the open market represents an efficient use of resources, minimizing waste and generating additional revenue streams.

Market Position and Competitive Advantage

  • Health-Centric Product: Rice Bran Oil’s health benefits, including its balanced fatty acid profile and vitamin E content, align with growing consumer demand for healthier cooking oils. This positions their business advantageously in a market increasingly driven by health consciousness.
  • Sustainability and Resource Utilization: The efficient use of by-products in creating value-added goods showcases their commitment to sustainability, a factor of growing importance to consumers, regulators, and investors alike.
  • Strategic Distribution: The establishment of a robust distribution network for both their branded and unbranded products enables deep market penetration and resilience against supply chain disruptions.

Future Outlook and Strategic Directions

To further strengthen their market position and operational excellence, consider the following strategic recommendations:

  • Expansion of Distribution Network: Broadening their distribution network beyond Maharashtra could significantly increase their market share and brand recognition.
  • Product Diversification: Exploring product line extensions, such as introducing rice bran-based health supplements or organic variants, could cater to niche markets and further differentiate their offerings.
  • Sustainability Reporting: Highlighting their sustainability practices and achievements through detailed reporting can enhance their brand image and appeal to a broader segment of environmentally conscious consumers.

In summary, their business operates at the intersection of health, sustainability, and food innovation, with significant growth opportunities in the evolving consumer goods landscape. Leveraging their current strengths while strategically navigating future trends will be key to sustaining and enhancing their market position.

Objects of the Ramdevbaba Solvent Limited IPO:

The company proposes to utilize the Net Proceeds from the Issue towards funding the following objects: i. Setting up of new manufacturing facility; ii. Repayment in full or in part, of certain outstanding borrowings; iii. Funding the working capital requirements of the company; and iv. General corporate purposes.

Ramdevbaba Solvent Limited IPO Details:

Open Date: Apr 15 2024
Close Date: Apr 18 2024
Total Shares: 5,913,600
Face Value: ₹ 10 Per Equity Share
Issue Size: 50.27 Cr.
Lot Size: 1600 Shares
Issue Price: ₹ 80 - 85 Per Equity Share
Listing At: NSE Emerge
Listing Date: Apr 24 2024

Promoters And Management:

Prashant Kisanlal Bhaiya is a Chairman and Whole-time Director of the Company. He was appointed on the Board of the Company since the incorporation of the Company. He holds a bachelor’s degree in commerce from the University of Nagpur. He looks after day-to-day operations at the Mahadula Manufacturing Facility and other activities such as production management & sales management (retail) in the Company and has an experience of more than fifteen (15) years in agro food business and related activities. He is a partner of M/s. Madangopal Kisanlal Bhaiya and M/s. Sri Siddhivinayak Agro Industries. Nilesh Suresh Mohata is a Managing Director of the Company. He was appointed on the Board of the Company since the incorporation of the Company. He is an undergraduate from the Nagpur University. He looks after day-to-day operations at the Bramhapuri Manufacturing Facility, procurement of raw materials for all the plants and requirement of technological upgradations in the plants. He has an experience of more than fifteen (15) years in food and agro based product processing industry. He is also a director in RBS Renewables Private Limited and a partner of M/s. Prabhukrupa Rice Mill and M/s. Shivkrupa Food products. Further, he is also a Trustee and President in Excelsior Foundation Trust. Tushar Ramesh Mohata is a Whole-time Director of the Company. He was appointed on the Board of the Company since January 10, 2012. He has done his higher secondary education from Kesharbai Lahoti Mahavidyalaya, Amravati. He looks after day-to-day operations at the Bramhapuri Manufacturing Facility and sales (wholesale) and marketing related activities in the Company. He has an experience of more than ten (10) years in agro food business and related activities.

Financials of Ramdevbaba Solvent Limited IPO:

Particulars ( In Lakhs )
Revenue from Operations 42,393 58,288 69,775 46,359
Other Income 325 238 658 211
Total Revenue 42,717 58,525 70,433 46,570
Cost of materials consumed 32,768 47,228 57,102 38,103
Purchases of Stock-In-Trade 1,058 1,411 1,783 170
Changes in Inventories 411 142 -283 -296
Employees Benefit Expenses 775 829 654 725
Other Expenses 6,054 6,968 8,663 5,689
EBITDA 1,650 1,947 2,516 2,178
Depreciation & Amortisation 421 516 228 319
Finance Cost 370 512 580 725
EBIT 1,230 1,431 2,288 1,859
OPM (%) 3.86% 3.33% 3.57% 4.68%
PBT 860 920 1708 1134
Tax 243 260 408 305
PAT 617 659 1300 829
NPM (%) 1.44% 1.13% 1.85% 1.78%
No.of Shares 221.25 221.25 221.25 221.25
EPS 2.78 2.97 5.87 3.74

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Ramdev Baba Solvent Limited 698 13 5.87 14.5 85 188
BCL Industries Limited 1,818 64 2.74 18.4 63 1,690
Gokul Refoils and Solvent Limited 3,137 24 2.44 17.5 42 414
Gujarat Ambuja Exports Limited 4,909 330 7.20 25.4 180 8,240
Kriti Nutrients Limited 797 21 4.15 11.9 99.8 500
Shri Venkatesh Refineries Limited 629 14 6.49 16.8 98 217
* All the data is as per FY23.

Recommendation on Ramdevbaba Solvent Limited IPO:

Review and Recommendation of Ramdevbaba Solvent by team IZ is 4/10. 1. The business overview provided outlines a comprehensive strategy and operational framework for a company involved in the manufacturing, distribution, marketing, and selling of Rice Bran Oil, along with its by-products. 2. Company Product and Market Focus Core Product: The company specializes in Physically Refined Rice Bran Oil, derived from the hard outer brown layer of rice, known for its high smoke point and nutritional value, including an ideal balance of Polyunsaturated Fats (PUFA) and Monounsaturated Fats (MUFA), and richness in Vitamin E. By-Products: In addition to the main product, the company also produces De-oiled Rice Bran (DORB), utilized as cattle, poultry, and fish feed, alongside other by-products like fatty acid, lecithin, gums, spent earth, and wax for various industrial applications. 3. Distribution and Marketing Brand Presence: The company markets Rice Bran Oil under its own brands, "Tulsi" and "Sehat", through a network of thirty-eight distributors in Maharashtra, ensuring widespread retail availability. Institutional Sales: A significant portion of sales comes from supplying to FMCG giants such as Mother Dairy, Marico Limited, and Empire Spices and Foods Ltd., with tailored product solutions to meet specific requirements. 4. Competitive Landscape Challenges: The company operates in a competitive FMCG landscape, contending with larger corporations possessing greater marketing and financial capabilities, as well as emerging entities that might adapt more swiftly to market and economic shifts. Strategic Positioning: The emphasis on product quality, customization for institutional clients, and a robust distribution network are key strategies to navigate competitive pressures. 5. The Revenue has Increased from Rs.423 Crores in FY21 to Rs.697 Crores in FY23. 6. The EBITDA has Increased from 16 Crore in FY21 to 25 Crores in FY23. 7. The PAT has Increased from 6 Crore in FY21 to 13 Crores in FY23. 8. As per FY23, CFO/EBITDA is 0.31, As per FY24, EPS is 4.99, 9. Market Capitalization is 188 Crore & P/E is 17.01x based on FY24.

Lead Manager of Ramdevbaba Solvent Limited IPO:

  1. Choice Capital Advisors Private Limited

Registrar of Ramdevbaba Solvent Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Ramdevbaba Solvent Limited Bhaiya Building, Anaj Bazar, Itwari, Nagpur - 440 002 Phone: +91 0712-7968 189 Email: cs@rbsl.co.in Website: http://www.ramdevbabasol.com/

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