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Rajgor Castor Derivatives IPO is a book built issue of Rs 47.81 crores. The issue is a combination of fresh issue of 88.95 lakh shares aggregating to Rs 44.48 crores and offer for sale of 6.66 lakh shares aggregating to Rs 3.33 crores. Rajgor Castor Derivatives Ltd, a prominent player in the castor oil-based products industry

About Rajgor Castor Derivatives Limited

• Till December 2021, the Company had leased out its Castor plant with installed capacity of 450 MT per day to its then Holding Company i.e., M/s. Mangalam Global Enterprise Limited.
• Thus prior to December 2021, company was engaged in the business of trading of agro commodity. However, from January, 2022 current promoters along with their family members (collectively referred to as Rajgor family) purchased entire stake of M/s. Mangalam Global Enterprise Limited. Since then, Rajgor family has been actively managing the business of manufacturing of Castor Oil, Castor Oil cake, High Protein Oil cake in the Castor Plant – Harij along with trading of agro-commodity which amounts to very small portion of revenue from operation in current financial year.
• Rajgor Castor Derivatives Limited has commenced manufacturing of Refined Castor Oil First Stage Grade (F.S.G.), Castor De-Oiled Cake and High Protein Castor De-Oiled Cake for the domestic market. It currently operating on a B2B business Model and offers its customers Castor Oil and its derivatives.
• Promoters Vasantkumar Shankarlal Rajgor, Maheshkumar Rajgor and Brijeshkumar Vasantlal Rajgor havecombined experience of more than 24 years in Castor Oil and Derivatives manufacturing.
• Company has its manufacturing facilities located at Harij, Gujarat.

Financials: Rajgor Castor Derivatives Limited

Rajgor Castor Derivatives IPO : Anchor

Rajgor Castor Derivatives IPO: Salient Points

• Promoters shareholding will drop from 78.01% to 57.40% post the IPO.
• The company plans to use the net proceeds from the offering as follows:

• Company is mainly engaged in the business of manufacturing Refined Castor Oil First Stage Grade (F.S.G.), Castor De Oiled Cake and High Protein Castor De Oiled Cake for the domestic market for B2B market.
• Castor oil has multiple industrial applications and is extensively demanded in Lubricants, Paints, Pharmaceuticals, Cable insulators, Sealants, Inks, Rubber and Textiles etc.
• It is also used to relief Constipation, Eyelashes grow, Hair grow, Skin moisturiser ad to improve immunity function. It is also used for applying on food grains to protect from the insects/fungus.
• Castor De-Oil Cake is fertilizer consisting of high content of Nitrogen, Phosphoric Acid, Potash and moisture retention and it is also an organic fertilizer which can be used as alternatives to chemical fertilizer. It is simple manure, which acts progressively that encourages soil microbial activity. High Protein Castor De Oiled Cake is an organic manure which enhances the fertility of the soil without causing any damage or decay.
• Company serves clients from various industries such as textiles, cosmetics, pharmaceuticals, and rubber
• It derives a large portion of its revenue from state of Gujarat. The State of Gujarat contributed 84.99%, 83.09%, 100% and 100% of total revenue for the period ended June 30, 2023 and for the financial year ended on March 31, 2023, March 2022 and March 2021, respectively.
• company aims to grow its operations on a pan-India basis.
• Top ten customers of company for the period ended June 30, 2023 and for the FY2022-23, FY 2021-22 and FY 2020-21 contributed for 75.37%%, 72.30%, 100% and 100%, respectively of its sales.

• Peers

• The company’s revenue has witnessed a significant jump from ₹9.7 crore in March 2021 to ₹428 crore in March 2023. Similar trend is reflected in profits.
• Rajgor Castor Derivatives IPO is coming at a PE ratio of 21.6x(fy23 earnings) and 15.5x PE based on FY24 earning annualized from first 3 months results.
• I am likely to apply in Rajgor Castor Derivatives IPO subject to funds availability.
• GMP as reported on social media has been around Rs. 10 .
• SME IPO are quite illiquid and volatile and exit options sometimes is delayed.
• Beeline Capital Advisors Pvt Ltd is the Lead Manager to the issue. It has a good record. Past issues handled by them include Karnika Industries Limited, Hi-Green Carbon Limited, Kody Technolab Limited, Chavda Infra Limited, Vinsys IT Services Limited,Ahasolar Technologies, Pentagon Rubber, Remus Pharmaceuticals, Sotac Pharmaceuticals, RBM Infracon Limited, Transvoy Logistics, Dev Labtech, Viviana Power Tech, Vital Chemtech, Aristo Bio-Tech and Lifescience, Viaz Tyres, Vertexplus Technologies etc.
• Spread X Securities Private Limited has acted as SME IPO Market Maker in reccent issues that include Karnika Industries Limited, Hi-Green Carbon Limited, Kody Technolab Limited, Chavda Infra Limited.
• SME IPO are quite illiquid and volatile and exit options sometimes is delayed. Also there appears top be considerable speculation element in current SME new issues.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.