Ramdevbaba Solvent IPO is in the business of manufacturing, distribution, marketing and selling of Physically Refined Rice Bran Oil (“Rice Bran Oil”). They also produce De-oiled Rice Bran (DORB), which is a by-product in the extraction of Rice Bran Oil and sell the same as cattle feed, poultry feed and fish feed. Ramdevbaba Solvent IPO plans to raise Rs 50.27 crore. The issue is entirely a fresh issue of 59.14 lakh shares.
IPO opens
Apr 15, 2024
IPO Closes
Apr 18, 2024
IPO Size (Rs.)
₹50.27 Cr
Breakup
Fresh issue only
Face Value:
₹ 10
IPO Price in Rs :
₹80 to ₹85 per share
Minimum Lot
1600 Shares
Listing At
NSE SME
QIB
~50 %
NII Quota
~15%
Retail Quota
~35%
Lead Manager
Choice Capital Advisors Pvt Ltd
Registrar
Bigshare Services
Market maker
Choice Equity Broking.
About Ramdevbaba Solvent Limited
They are in the business of manufacturing, distribution, marketing and selling of Physically Refined Rice Bran Oil (“Rice Bran Oil”).
They manufacture and sell Rice Bran Oil to FMCG companies amongst others, Mother Dairy Fruit & Vegetable Private Limited, Marico Limited and Empire Spices and Foods Ltd.
We also manufacture, market and sell Rice Bran Oil under own brands “Tulsi” and “Sehat” through thirty-eight (38) distributors who in turn sell to various retailers across Maharashtra.
They also produce De-oiled Rice Bran (DORB), which is a by-product in the extraction of Rice Bran Oil and sell the same as cattle feed, poultry feed and fish feed in the States of Maharashtra, Goa, Gujarat, Madhya Pradesh, Andhra Pradesh, Telangana, Karnataka, Kerala and Tamil Nadu.
They have two (2) Manufacturing Facilities out of which one is situated at Bramhapuri near Nagpur, Maharashtra and another one is situated at Mahadula near Nagpur, Maharashtra.
The Manufacturing Facilities comprise of three (3) solvent extraction facilities and two (2) oil refinery facilities with an aggregate installed capacity of around 2,55,000 MTPA and 48,000 MTPA, respectively.
Financials: Ramdevbaba Solvent IPO
Particulars (₹ in Lacs.)
2023 (09)
2023 (12)
2022 (12)
2021 (12)
Revenue from Operations
46,359.01
69,775.26
58,287.73
42,392.50
Gross Profit
8,382.19
11,173.60
9,505.71
8,155.20
Gross Profit Margin
18.08%
16.01%
16.31%
19.24%
EBITDA
2,178.41
2,515.52
1,946.76
1,650.42
EBITDA Margin (in %)
4.70%
3.61%
3.34%
3.89%
Profit / (loss) after tax
828.9
1,300.15
659.15
617.06
Net Profit Margin (in %)
1.79%
1.86%
1.13%
1.46%
Share Capital
1,621.18
458.73
458.73
458.73
Net Worth
6,857.15
4,783.25
3,483.10
2,823.95
Earnings per share (diluted)
5.6
9.45
4.79
4.48
Net Asset Value
46.33
34.76
25.31
20.52
Total Borrowings
9,998.78
9,922.63
6,485.67
4,474.16
Post issue Share Capital
2213
FV
10.0
IPO price
85.0
EPS Fy23
5.9
PE Fy23
14.5
EPS Fy24 (annualized)
5.0
PE Fy24 (annualized)
17.0
Market cap in Lacs
18,811
Market cap / Sales
1.68
Anchors: Ramdevbaba Solvent IPO
Ramdevbaba Solvent IPO: Salient Points
. For the nine months ended December 31, 2023 and Fiscals 2023, 2022 and 2021, revenue from their Rice Bran Oil under own brands and to other brands of leading FMCG companies on a contractual basis amounted to ₹ 19,396.87 lakhs, ₹ 29,698.16 lakhs, ₹ 29,030.38 lakhs and ₹ 18,555.68 lakhs contributing 41.84%, 42.57%, 49.81% and 43.77% during nine months period ended December 31, 2023 and Fiscals 2023, 2022 and 2021 of revenue from operations, respectively.
They derive significant portion of revenues from the sale of De-Oiled Rice Bran (DORB) which is a by-product produced during the manufacturing of Rice Bran Oil. They sell DORB to the southern states of Andhra Pradesh, Telangana, Karnataka, Kerala and Tamil Nadu which is used by fish & poultry farmers, traders and certain end user industries for their products. Sale of DORB amounted to ₹ 21,104.74 lakhs, ₹ 26,097.18 lakhs, ₹ 16,340.18 lakhs and ₹ 16,108.96 lakhs contributing 45.52%%, 37.40%, 28.03% and 38.00% during nine months period ended December 31, 2023 and Fiscals 2023, 2022 and 2021, respectively of revenue from operations.
We distribute, market and sell Rice Bran Oil under our own brands “Tulsi” and “Sehat”. For the nine months ended December 31, 2023 and Fiscals 2023, 2022 and 2021, revenue from own brand Rice Bran Oil business was ₹ 3867.13 lakhs, ₹ 7,882.14 lakhs, ₹ 5,471.00 lakhs and ₹ 3,076.70 lakhs contributing 8.34%, 11.30%, 9.39% and 7.26%, respectively of revenue from operations.
Product
For 9m Dec 2023
Fiscal 2023
Fiscal 2022
Fiscal 2021
Amount (Lacs)
% of Revenue
Amount (Lacs)
% of Revenue
Amount(Lacs)
% of Revenue
Amount (Lacs)
% of Revenue
Rice Bran Oil (Own Brands)
3,867.13
8.34
7,882.14
11.30%
5,471.00
9.39%
3,076.70
7.26%
Rice Bran Oil (Other Brands)
15,529.73
33.50
21,816.02
31.27%
23,559.38
40.42%
15,478.98
36.51%
DORB
21,104.74
45.52
26,097.18
37.40%
16,340.18
28.03%
16,108.96
38.00%
Other products*
5,844.87
12.61
12,174.61
17.45%
9,530.73
16.35%
6,543.04
15.43%
Trading of Rice Bran
12.54
0.03
1,805.30
2.59%
3,386.45
5.81%
1,184.82
2.79%
Total
46,359.01
100.00%
69,775.25
100.00%
58,287.47
100.00%
42392.50
100.00%
They derives majority of revenues from customers located in Maharashtra, Andhra Pradesh and Uttar Pradesh.
The Net Proceeds are proposed to be utilized in the manner set forth below for the objectives of the IPO:
Particulars
Amount
Repayment/prepayment, in part or full, of certain of our borrowings
1,10,000.00
To meet out the capital expenditure of our company “Creative graphics”
1,00,000.00
To meet out the inorganic growth through unidentified acquisition for company*
50,000.00
General Corporate Expenses
[●]
They intend to set up corn de-oiling manufacturing facility, adjoining to exisiting manufacturing unit at Brahmapuri, which involves crushing and processing of grains like corn using a process called dry-milling. The plant proposed to be installed is based on “Zero Liquid Discharge – ZLD” based on the DRI-CORN Technology. The de-oiled corn cake obtained from this process along with de-oiled rice bran (DORB) from the existing manufacturing facilities will be supplied to RBS Renewables Private Limited, an Associate company, which is setting- up Ethanol manufacturing unit adjoining to the existing Brahmapuri unit.
The Company has a thirty percent (30%) stake in this Associate company and will be entering into an arrangement with RBS Renewables Private Limited to supply the de-oiled corn cake and de-oiled rice bran (DORB).
Peers
Company
CMP (₹)
Revenue(₹cr)
Net Profit(₹ cr)
NPM %
PE
Macp/sales
RONW
Ramdev Baba Solvent Limited
85
697
13
1.9%
14.5(17)
0.3
31.46
BCL Industries Limited
58.2
1818
64
3.5%
17
20.1
15.19
Gokul Refoils and Solvent Limited
58.2
3136
132.41
4.2%
12.92
0.13
7.64
Gujarat Ambuja Exports Limited
164.55
4908
330
6.7%
23.2
1.51
14.5
Kriti Nutrients Limited
104
786
20.8
2.6%
12.27
0.75
11.7
Shri Venkatesh Refineries Limited
95.4
629
14
2.2%
16.3
0.38
24.09
They intend to enter a new product category viz. blended oil for both their FMCG clients and customers. They have received “AGMARK” certification for the same.
Ramdevbaba Solvent IPO is being offered at a PE of 14.5x (2023 earnings) and 17x ( 2024 annualized earning) .
I may apply in Ramdevbaba Solvent IPO subject to availability of funds though it does not look that attractive . May apply on Day3 with expectation of small gains on listing if they materialize.
GMP as reported on social media has been Rs.15.
Choice Capital Advisors Pvt Ltd is the lead manager with a very limited record in SME space. IPO’s by Choice Capital Advisors Pvt Ltd as Lead Manager include Vishnu Prakash R Punglia Limited (mainboard), Global Space Technologies (old SME) and older issues like Khemani Distributors, Bhanderi Infracon Ltd, Chemtech Industrial Valves Ltd.
SME IPO are much more risky and volatile than mainboard IPOs.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared 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.
