IPO News

Vishnu Prakash R Punglia has filed draft papers with capital markets regulator Sebi to raise funds through an initial public offering (IPO). The IPO comprises a fresh issue of 3.12 crore equity shares with no offer-for-sale (OFS) component.

The IPO size is expected to be Rs 300 crore. Proceeds from the fresh issuance to the tune of Rs 58.64 crore will be utilised for purchasing capital equipment, Rs 140 crore will be used for funding the working capital requirements of the company and the balance for general corporate purposes. Choice Capital Advisors and Pantomath Capital Advisors are the book-running lead managers. The equity shares are proposed to be listed on BSE and NSE.

The Jodhpur-based company has experience in the design and construction of major infrastructure projects for the central and state governments, with ongoing projects in nine states.

Go Digit General Insurance has refilled draft red herring prospectus (DRHP) with Securities and Exchange Board of India (SEBI) for its initial public offering (IPO) after making certain changes to its employee stock appreciation rights scheme. This came after SEBI returned Go Digit's draft IPO papers on January 30 and asked the company to refile the documents with certain updates. The company had first filed the DRHP with Sebi in August 2022 to raise funds through an initial share sale.

The size of the company's IPO remain unchanged in the revised documents. The IPO comprises fresh issuance of equity shares worth Rs 1,250 crore and an offer-for-sale (OFS) of 10,94,45,561 equity shares by a promoter and existing shareholders. Proceeds from the fresh issuance have been proposed to be utilised for the augmentation of the company's capital base and maintenance of solvency levels and general corporate purposes. ICICI Securities, Morgan Stanley India Company, Axis Capital, Edelweiss Financial Services, HDFC Bank, and IIFL Securities are the book-running lead managers for the issue. The equity shares of the company will be listed on BSE and NSE.

Go Digit offers motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance, and other insurance products, to meet the needs of the customers.

Zaggle Prepaid Ocean Services has received the Securities and Exchange Board of Indiaís (SEBI) approval to float an initial public offering (IPO).

Proceeds from the fresh issue would be utilised towards customer acquisition and retention, development of technology and products, payment of debt and for general corporate purposes. ICICI Securities, Equirus Capital, IIFL Securities and JM Financial have been appointed as merchant bankers to manage the IPO. The equity shares of the company will be listed on the BSE and NSE.

Founded in 2011, Zaggle Prepaid Ocean Services operates in the business-to-business-to-customer segment. It has created a market niche in the country by offering a combined solution for spend management through prepaid cards and employee management (through SaaS).

Cyient DLM has received the Securities and Exchange Board of Indiaís (SEBI) approval to float an initial public offering (IPO).

The funds raised through the IPO would be utilised for funding incremental capital requirements, capital expenditure, debt payment, achieving inorganic growth through acquisitions as well as for general corporate purposes. Axis Capital and JM Financial are the book running lead managers to the issue. The equity shares of the company will be listed on the BSE and NSE.

Cyient DLM, a subsidiary of Cyient, is the leading integrated EMS and solutions provider with a focus on the entire life cycle of a product, including design, build and maintenance. It has three state manufacturing facilities in Hyderabad, Bengaluru and Mysore.

Aeroflex Industries has filed draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise as much as Rs 350 crore through an initial public offering (IPO).

Proceeds from the fresh issue will be utilised to the extent of Rs 35 crore for the payment of debt, Rs 84 crore for funding its working capital requirements, and a certain amount will be used for general corporate purposes and acquisitions for inorganic growth. Pantomath Capital Advisors is the sole book-running lead manager to the issue. The companyís equity shares are proposed to be listed on the BSE and NSE.

Aeroflex is a manufacturer and supplier of metallic flexible flow solution products, catering to global markets. It exports its products to more than 80 countries including Europe, USA and others and generates 80 per cent of its revenue from exports.

SPC Lifesciences has filed draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO). The Initial Public Offering (IPO) consists of fresh issuance of equity shares worth Rs 300 crore and an Offer For Sale (OFS) of 89.39 lakh equity shares by promoter -- Snehal Rajivbhai Patel.

The proceeds from the fresh issue will be used to pay debt, to support working capital needs and to fund capital expenditure requirements for setting up Phase-2 at its Dahej facility in order to expand product offerings of pharmaceutical intermediates, and for general corporate purpose. Ambit and HDFC Bank are the book running lead managers to the issue. The shares of the company will be listed on the BSE and NSE.

SPC Lifesciences is a leading manufacturers of advanced intermediates for certain key active pharmaceutical ingredients.

Netweb Technologies India has filed draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise as much as Rs 700 crore through an initial public offering (IPO). The IPO comprises a fresh issue of equity shares worth Rs 257 crore and an offer for sales of 85 lakh equity shares by promoters.

Proceeds of the fresh issue to the tune of Rs 32.77 crore will be used to fund capital expenditure, Rs 128.02 crore to support long-term working capital, Rs 22.5 crore for debt payment, besides, general corporate purposes. Equirus Capital and IIFL Securities are the book-running lead managers to the issue. The equity shares of the company will be listed on the BSE and NSE.

Netweb Technologies is one of the country's leading high-end computing solutions (HCS) providers. It is one of the few original equipment manufacturers (OEMs) in the country and is a recipient of production-linked incentives schemes of the Government of India.

JG Chemicals has received the Securities and Exchange Board of Indiaís (SEBI's) approval to float an initial public offering (IPO). The IPO comprises fresh issue of equity shares worth up to Rs 202.50 crore and an offer-for-sale (OFS) of 57 lakh equity shares by its existing promoter group shareholders. Equity shares of the company will be listed on BSE and NSE.

The company, which filed the draft red herring prospectus with the SEBI in January 2023, got the regulatorís approval on March 20, 2023. Proceeds from the fresh issue will be used for investment in its material subsidiary BDJ Oxides. It will use Rs 45 crore in repayment of borrowings availed by its arm, Rs 5.31 crore will be used for setting up a Research & Development centre, Rs 65 crore will be used to fund the long-term working capital requirements of its material arm. It will also use Rs 35 crore for funding the long-term working capital requirements of the company and other general corporate purposes. Centrum Capital, Emkay Global Financial Services and Keynote Financial Services are the book-running lead managers to the issue.

The Kolkata-based firm is India's largest zinc oxide manufacturer in terms of production and revenue.

IndiaFirst Life Insurance Company has received the Securities and Exchange Board of Indiaís (SEBI) approval to float an initial public offering (IPO). The IPO comprises a fresh issue of up to Rs 500 crore along with an offer for sale (OFS) of up to 14,12,99,422 equity shares by the promoters and existing shareholders of the company.

The company, which filed the draft red herring prospectus with the SEBI in October 2022, got the regulatorís approval on March 15, 2023. The net proceeds from the fresh issuance worth Rs 500 crore will be used towards augmentation of its capital base to support solvency levels.

ICICI Securities, Ambit, BNP Paribas, BOB Capital Markets, HSBC Securities and Capital Markets (India), Jefferies India and JM Financial are the book-running lead managers to the issue. The equity shares will be listed on the BSE and NSE.

IndiaFirst Life Insurance Company (IndiaFirst Life) is one of the fastest growing private life insurers in India. IndiaFirst Life is supported by an extensive bancassurance network provided by Bank of Baroda and Union Bank, two of India's biggest public sector banks.

Tata Technologies, a subsidiary of Tata Motors, has filed draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO). The equity shares of the company are proposed to be listed on both -- NSE and BSE.

The IPO is purely an offer for sale (OFS), where the company will sell up to 9.57 crore equity shares representing approximately 23.60 per cent of its paid-up share capital.  Under the OFS, Tata Technologies' parent company Tata Motors will offload 8.11 crore shares or a 20 per cent stake in the company. JM Financial, Citigroup Global Markets India and BofA Securities India are the book running lead managers to the issue.

Tata Technologies is a leading global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs).

IPO Name Price Band Open Date Close Date Minimum Qty Apply
BIRDYS 120 15-04-2024 18-04-2024 1200

IPO type

EQUITY

Face value

10

Lot size (qty)

1200

Category

Retail

Retail discount

0.00

Min - Max inv amt

120

Issue size

1372800

RBSL 80 - 85 15-04-2024 18-04-2024 1600

IPO type

EQUITY

Face value

10

Lot size (qty)

1600

Category

Retail

Retail discount

0.00

Min - Max inv amt

80 - 85

Issue size

4233600

IPO Details

COMPANY NAME
Grill Splendour Services Ltd.
ADDRESS
J 1, Shram Siddhi Vinayak Premises Co- Op Soc Ltd , C-105, 1st Floor, Plot - 8, Wadala Truck Terminal Road , Antop Hill
CITY / STATE / PINCODE
Mumbai Maharashtra 400037
WEBSITE
www.birdys.in
PHONE
022 50029517
EMAIL
ipo@birdys.in
LEADMANAGER
Inventure Merchant Bankers Services Pvt Ltd.
PROMOTERS
Srinidhi V Rao, Vandana Srinidhi Rao, Vivek Vijaykumar Sood
PRE SHARE CAP
OFFER TO PUBLIC
PRE PROMOTER HOLDER
POST PROMOTER HOLD
REGISTRAR
Bigshare Services Pvt Ltd
ADDRESS
J 1, Shram Siddhi Vinayak Premises Co- Op Soc Ltd , C-105, 1st Floor, Plot - 8, Wadala Truck Terminal Road , Antop Hill , 400093
Registrar Phone
91-022-62638200
Registrar EMail
Investor@bigshareonline.com
Registrar Fax
91-022-62638299
Registrar WebSite
Objective


Description
We are a chain of gourmet Bakery and Patisserie spread across Mumbai through 18 retail stores, a centralized production facility and multiple corporate clients. We offer freshly prepared treats from traditional to ‚Äėmade to order‚Äô customized products. These products are hand crafted with love and passion. Both our Promoters individually have 30+ years of experience in Hospitality industry.Grill Splendour Services Private Ltd. was incorporated in November 2019 as a hospitality company to acquire the bakery and confectionary business alongwith brand Birdy‚Äôs Bakery and Patisserie from WAH Restaurants Private Limited. The acquisition was done via a Business Transfer and Intellectual Property Assignment Agreement dated December 27, 2019 (Acquisition Agreement). After that the company proceeded to invest in the business and grow the brand and spread presence.

COMPANY NAME
Ramdevbaba Solvent Ltd.
ADDRESS
Bhaiya Building , Anaz Bazar , Itwari
CITY / STATE / PINCODE
Nagpur Maharashtra 440002
WEBSITE
www.ramdevbabasol.com
PHONE
0712-7968189
EMAIL
cs@rbsl.co.in
LEADMANAGER
Choice Capital Advisors Pvt Ltd
PROMOTERS
Aayush Prashant Bhaiya, Kishanlal Prashant (HUF), Mohata Nilesh Suresh (HUF), Nilesh Suresh Mohata, Prashant & Ayush (HUF), Prashant Kisahnlal Bhaiya (HUF), Prashant Kisanlal Bhaiya, Prashant Prateek (HUF), Tushar Ramesh Mohata
PRE SHARE CAP
13134750
OFFER TO PUBLIC
5913600
PRE PROMOTER HOLDER
81.01
POST PROMOTER HOLD
REGISTRAR
Bigshare Services Pvt Ltd
ADDRESS
Bhaiya Building , Anaz Bazar , Itwari , 400093
Registrar Phone
91-022-62638200
Registrar EMail
Investor@bigshareonline.com
Registrar Fax
91-022-62638299
Registrar WebSite
Objective
1. Setting up of new manufacturing facility2. Repayment in full or in part, of certain of our outstanding borrowings3. Funding the working capital requirements of our Company; and4. General corporate purposes.

Description
We are in the business of manufacturing, distribution, marketing and selling of Physically Refined Rice Bran Oil (?Rice Bran Oil?). We manufacture and sell Rice Bran Oil to FMCG companies like Mother Dairy Fruit & Vegetable Private Limited, Marico Limited and Empire Spices and Foods Ltd. We also manufacture, market and sell Rice Bran Oil under our own brands ?Tulsi? and ?Sehat? through thirty-eight (38) distributors who in turn sell to various retailers across Maharashtra. Rice bran oil is the oil extracted from the hard outer brown layer of rice called =bran‚Äė. It is well known for its high smoke point of 232 ¬įC i.e. 450 ¬įF and mild flavour, making it fit for high-temperature cooking methods such as stir-frying and deep-frying. It has an ideal balance of Polyunsaturated Fats (PUFA) and Monounsaturated Fats (MUFA), in almost a 1:1 ratio. Since rice bran oil is made from bran, it is rich in Vitamin E, an antioxidant.
IPO Analysis

Grill Splendour Services coming with IPO to raise Rs 16.47 crore

The issue will open for subscription on April 15, 2024 and will close on April 18, 2024

Details

Grill Splendour Services 

  • Grill Splendour Services is coming out with an initial public offering (IPO) of 13,72,800 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 120 per equity share. 
  • The issue will open for subscription on April 15, 2024 and will close on April 18, 2024.
  • The shares will be listed on NSE Emerge Platform.
  • The share is priced at 12.00 times higher to its face value of Rs 10.
  • Book running lead manager to the issue is Inventure Merchant Banker Services.
  • Compliance Officer for the issue is Nikita Jawa.

Profile of the company

The company is engaged in the business of selling Bakery and patisserie food items through chain of Birdy‚Äôs store. The company is a chain of gourmet Bakery and Patisserie spread across Mumbai through retail stores, a centralized production facility and multiple corporate clients. It offers fresh food products from traditional to ‚Äėmade to order‚Äô as required by the Customers. The company was incorporated in November 2019 as a hospitality company to acquire the bakery and confectionary business along with brand Birdy‚Äôs Bakery and Patisserie from WAH Restaurants. The acquisition was done via a Business Transfer and Intellectual Property Assignment Agreement dated December 27, 2019 (Acquisition Agreement). After that the company proceeded to invest in the business and grow the brand and spread presence. The brand Birdy‚Äôs was originally set up as ‚ÄėBirdy‚Äôs by Taj‚Äô. Over a period, it was sold to WAH Restaurants and from them the same was acquired by the company vide above referred Acquisition Agreement. The primary focus of the Company was to bring back the quality and sheen of the brand. 

Its production facility is largely based on a manual production format. The food items are handmade by its chefs and they are of various varieties / sizes and types accordingly, there is no possibility to work out capacity. Hence capacity and capacity utilization does not apply to its business. It requires many ingredients viz. Chocolate, Premixes, Grocery, Whipping & Cooking Cream, Butter as raw material for which it supplies chain have a panel of listed negotiated vendors. These vendors supply all products like grocery, chocolate, dairy etc. Its major requirements are met through local vendors. 

The Promoters of the company, Srinidhi V Rao and Vandana Srinidhi Rao, individually have more than 30 years of experience in Hospitality industry. Its vision is to make available affordable experiential stores to meet every aspirational needs of individuals. Its Promoters inspirational leadership has led Grill Splendour Services (GSSL) to be recognised as one of the trusted food chains in its region. Further, the Company is managed by a team of experienced personnel. The team comprises of personnel having customer relationship, operational, marketing and business development experience.

Proceed is being used for:

  • Funding additional working capital requirements
  • Pre-payment/Repayment, in full or part, of certain outstanding borrowings availed by the company
  • General corporate purposes

Industry overview

India’s food service sector is one of the vibrantly growing segment, which has witnessed noticeable growth in past few years. The sector, including both organised and unorganized segments, stands at Rs 4,23,865 crore in 2018-19. The sector is expected to reach to $79.65 billion by 2028, with a CAGR of 11.19%. Factors accelerating the progress of the food services sector include changing demographics, increase in disposable income, growing urbanization, increasing internet penetration and proliferation of online services. Also, young affluent couples with penchant for eating out are adding to the growth further.

According to a report, the market for food services in India is predicted to increase from $41.1 billion in 2022 to $79.65 billion by 2028, with a CAGR of 11.19%. According to the Food Service and Restaurant Business Report 2022-23 by Francorp and restaurantindia.in, the industry is predicted to employ 1 crore people by 2025, despite losing over 20 lakh jobs at the height of the COVID-19 pandemic. The country's restaurant and food service market is split into two segments, with the unorganised segment holding the lion's share of the market, according to the report, which also noted that the organised sector expanded rapidly between 2014 and 2020. The market for quick service restaurants (QSRs) in the country is predicted to be worth $690.21 million in 2022 and $1069.3 million in 2027, rising at a CAGR of 9.15%, according to the report's additional findings. The QSR chain market is anticipated to increase at a CAGR of 23% over the course of FY20‚Äď25, making it the fastest growing sub-segment overall in the food service industry.

Pros and strengths

Strong Brand recognition: The brand Birdy‚Äôs was originally set up as ‚ÄėBirdy‚Äôs by Taj‚Äô. Over a period, it was sold to WAH Restaurants and from them the same was acquired by the company. The primary focus of the company was to bring back the quality and recognition of the brand. It did that over a period of last few years by a series of initiatives.

Chain of stores spread across Mumbai region: It is a chain of gourmet Bakery and Patisserie spread across Mumbai and Thane through 17 retail stores, a centralized production facility and multiple corporate clients. This presence helps it serves customer in major part of city and create satisfactory base of customers. The company after acquisition of Birdy’s brand has renovated more than half the shops. These shops now boast of seating, music ambience, table service, free library and freshly made food and beverages. These cafes attract a new category of customers called dine- in which was absent earlier.

Strong B2B customer relationships: Its quality of products and client relationships help the company to get repeat business from its B2B customers. Its client relationships also help it to cross sell its other products and services to them. Further it has been mutually value creating and stable association with its customers through products & services offered by the company. This has helped it creates a long-term relationship with its customers and improve its customer retention strategy. Through these efforts, it aims to become the ‚Äėfirst choice service provider‚Äô for all its customers for the products / services it offers.

Risks and concerns

B2B operations are subject to high working capital requirements: it started pursuing B2B business aggressively from end of last fiscal. Its B2B business requires significant amount of working capital and major portion of its working capital is utilized towards debtors and inventories. It expects this to grow further in the coming years as it increases its focus on B2B business. The results of operations of its business are dependent on its ability to effectively manage its inventory and trade receivables. To effectively manage its trade receivables, it must be able to accurately evaluate the credit worthiness of its customers and ensure that suitable terms and conditions are given to them in order to ensure its continued relationship with them. However, if its management fails to accurately evaluate the terms and conditions with its customers, it may lead to delay in recoveries which could lead to a liquidity crunch, thereby adversely affecting its business and results of operations.

Do not have long-term contracts with customers: It generates retail sales generally by its continuing relationships with its customers as well as walk-in customers. It does not enter in any long- term contract with any of its customers. It offers wide range of food products which are being sold under its stores operating under registered brand name ‚ÄėBirdy‚Äôs‚Äô. It has entered into agreements with most of its B2B customers and loss of any significant customers would have a material effect on its financial results. it cannot assure that the customers would renew their agreements or pay it in a timely manner or it would be able maintains the historical levels of business from these customers or that it will be able to replace these customers in case it losses any of them.

Operate in a highly competitive industry: The segments of the industry in which it operates are subject to intense competition. Its principal competitors are other established brands of the similar products it sells, including other major retail chains with well-established and recognized brands. If it is unable to compete successfully, its revenues or profits may decline or its ability to maintain or increase its market share may be diminished. It competes primarily on brand name recognition and reputation, customer satisfaction, quality of service etc. Some of its competitors are larger than it is in terms of size of operations and its competitors may also have greater financial and marketing resources than it does, which could allow them to improve their properties and expand and improve their marketing efforts in ways that could affect its ability to compete for guests effectively. In addition, industry consolidation may exacerbate these risks.

Outlook

Grill Splendour Services is a chain of gourmet Bakery and Patisserie spread across Mumbai through retail stores, a centralized production facility and multiple corporate clients. It offers fresh food products from traditional to ‚Äėmade to order‚Äô as required by the Customers. On the concern side, it operates in a competitive market and competition is based primarily on quality of products and pricing of such products & services. To remain competitive in the market it strives to improve its sales & marketing efforts, reduce cost and improve operating efficiencies. If it fails to maintain its strengths, its competitors will gain an advantage over it, which would adversely affect its market share and results of operation. It faces competition from those who may be better capitalized, have longer operating history, have greater brand presence, and better management than it. If it is unable to manage its business, it might impede its competitive position and profitability.

The company is coming out with an IPO of 13,72,800 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 120 per equity share to mobilize Rs 16.47 crore. On performance front, the revenue from operations for the FY 2023 is Rs 1,529.35 lakh as compared to Rs 1,150.49 lakh during the FY 2022 showing an increase of 32.93%. This overall increase in sales was mainly due to increase in B2B business during FY 2023. Profit after tax (PAT) increased from Rs 3.46 lakh for the FY 2022 to Rs 199.10 lakh in FY 2023. Meanwhile, the company will look to acquire brands of different styles that are scalable. These brands would offer popular cuisines in a casual dining format. This would enable them to have a lower real estate footprint. These brands would have processes where bulk of the production is done in the central kitchen and the restaurant kitchens are more final assembly/finishing areas. This would mean lower skill requirements and hence lower staff costs. It would also lead to consistency and ease of roll out.

Ramdevbaba Solvent coming with IPO to raise upto Rs 50.27 crore

The issue will open for subscription on April 15, 2024 and will close on April 18, 2024

Details

Ramdevbaba Solvent 

  • Ramdevbaba Solvent is coming out with initial public offering (IPO) of 59,13,600 shares of Rs 10 each in a price band Rs 80-85 per equity share.  
  • The issue will open for subscription on April 15, 2024 and will close on April 18, 2024.
  • The shares will be listed on NSE Emerge Platform.
  • The face value of the share is Rs 10 and is priced 8.00 times of its face value on the lower side and 8.50 times on the higher side.
  • Book running lead manager to the issue is Choice Capital Advisors.
  • Compliance Officer for the issue is Pratul Bhalchandra Wate.

Profile of the company

The company is in the business of manufacturing, distribution, marketing and selling of Physically Refined Rice Bran Oil (Rice Bran Oil). It manufactures and sell Rice Bran Oil to FMCG companies like Mother Dairy Fruit & Vegetable, Marico and Empire Spices and Foods. It also manufactures, market and sell Rice Bran Oil under its own brands ‚ÄúTulsi‚ÄĚ and ‚ÄúSehat‚ÄĚ through thirty-eight (38) distributors who in turn sell to various retailers across Maharashtra. Rice bran oil is the oil extracted from the hard outer brown layer of rice called ‚Äėbran‚Äô. It is well known for its high smoke point of 232 degree C i.e. 450 degree F and mild flavour, making it fit for high-temperature cooking methods such as stir-frying and deep-frying. It has an ideal balance of Polyunsaturated Fats (PUFA) and Monounsaturated Fats (MUFA), in almost a 1:1 ratio. Since rice bran oil is made from bran, it is rich in Vitamin E, an antioxidant. It also produces 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. Other by-products such as fatty acid, lecithin, gums, spent earth and wax are sold in the open market.

Proceed is being used for:

  • Setting up of new manufacturing facility.
  • Repayment in full or in part, of certain of outstanding borrowings.
  • Funding the working capital requirements of the company. 
  • General corporate purposes. 

Industry overview

Over the years, agricultural production in India has consistently recorded higher output. India ranked first in pulses & milk, second in vegetable primary, fruit primary wheat & rice and third in cereals, eggs primary in World Agriculture in 2019. An abundant supply of raw materials, increase in demand for food products and incentives offered by the Government has impacted food processing sector positively. During the 5 years ending 2020-21, Food Processing sector has been growing at an average annual growth rate of around 8.38 per cent as compared to around 4.87 per cent in Agriculture & allied sector (at 2011-12 prices). Food Processing Sector has also emerged as an important segment of the Indian economy in terms of its contribution to GDP, employment and investment. The sector constituted as much as 10.54 per cent and 11.57 per cent of GVA in Manufacturing and Agriculture sector respectively in 2020-21 (at 2011-12 prices). 100% FDI is permitted under the automatic route in food processing industries. 100% FDI is allowed through Government approval route for trading, including through e-commerce in respect of food products manufactured and/or produced in India. The sector has witnessed FDI equity inflow of USD 5.72 billion during April, 2014 to September, 2022.

Edible oils and Fats are essential ingredients for a wholesome and balanced diet and they are vital items of mass consumption. The Department of Food and Public Distribution deals with issues related to the Vegetable Oil Processing Industries, Price Control, Inter State trade & commerce and also supply & distribution of vanaspati, oilseeds, vegetable oil, cakes and fats. The Directorate of Sugar and Vegetable oils is staffed with qualified technical people who assist the Ministry in the coordinated management of Vegetable Oils Policy, particularly relating to production/availability and monitoring of prices. India is a vast country and inhabitants of several of its regions have developed specific preference for certain oils largely depending upon the oils available in the region. For example, people in the South and West prefer groundnut oil while those in the East and North use mustard/rapeseed oil. Likewise several pockets in the South have a preference for coconut and sesame oil. Inhabitants of northern plain are basically consumers of fats and therefore prefer Vanaspati, a term used to denote a partially hydrogenated edible oil mixture of oils like soyabean, sunflower, ricebran and cottonseed oils.

Pros and strengths

Strategic location of manufacturing facilities: The company’s Manufacturing Facilities are situated near Nagpur, Maharashtra giving it the strategic advantage to supply and distribute Rice Bran Oil in Maharashtra and DORB across various states in India. It is the preferred partner for its FMCG clients for manufacturing Rice Bran Oil as it can be easily distributed to central and southern India from Nagpur. Its strategic location also enables it to 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.

Easy availability of rice bran around manufacturing facilities: Rice bran oil is extracted from the hard outer brown layer of rice called bran. There are various rice mills which are situated near its Manufacturing Facilities ensuring the supply of rice bran to it on regular basis. Vidarbha region is one of the largest rice producing area in the State of Maharashtra and therefore rice bran is easily available at competitive prices. The ease of availability of rice bran in abundance, which is its main raw material, ensures the smooth operations of its Manufacturing Facilities, and production and sale of its finished products. In addition to the ease in availability, rice bran is also available to it at a competitive price which in turn enhances its ability to compete aggressively in pricing of its finished product as compared to its competitors.

Integrated operations and economies of scale: Manufacture of Rice Bran Oil mainly involves two processes: (i) solvent extraction of crude oil from rice bran; and (ii) refining the extracted crude rice bran oil. It has integrated operations involving the extraction of oil from bran and refining of the extracted oil enabling it to meet the time, cost efficiency, quality and quantity requirements. Its Manufacturing Facilities have been designed in such a manner that for its operations, materials from one production process are transferred to the following production process through pipelines in a seamless way. This integration allows it not only to save costs but also helps it achieve economies of scale by controlling the inputs / production based on each previous process, improving its efficiency and margins.

Risks and concerns

Depends on sale of products to certain FMCG companies: The company supplies rice bran oil in bulk to certain leading FMCG companies like Mother Dairy Fruit & Vegetable, Marico and Empire Spices and Foods. It has historically derived, and may continue to derive, a significant portion of its income from sales to these FMCG companies. Any reduction in orders from its FMCG customers would adversely affect its income. The demand from its FMCG customers determines its revenue levels and results of operations, and its sales are directly affected by their production and inventory levels. Over the years, it has developed strong relationships with its FMCG customers through whom it has been able to increase the quality of its offerings. Its business depends on the continuity of business with these customers. It has not entered into any long-term agreements with its FMCG customers and instead rely on purchase orders to govern the volume and other terms of its sales of products. Consequently, there is no commitment on the part of its FMCG customers to continue to place new purchase orders with it and as a result, its cash flow and consequent revenue may fluctuate significantly from time to time. Further, it may not find other FMCG customers for the surplus or excess capacity, in which case it may be forced to incur a loss due to lack of utilization of its production capacity. 

Business operations require significant working capital: The company’s business operation requires significant working capital specifically for raw materials and finished goods to undertake manufacturing operations. The working capital requirements for FY 2025 of the Company is estimated at Rs 1,200.00 lakh and will be funded out of the Net Proceeds, whereas the balance working capital requirements would be arranged from its internal accruals and borrowings from banks and financial institutions. However, it may not be able to obtain financing on better and favourable terms from bankers or financial institutions, if and when it decides to avail institutional funding. Further, it cannot assure that its bankers or financial institutions may implement new credit policies, adopt new pre-qualification criteria or procedures, raise interest rates or add restrictive covenants in loan agreements, some or all of which may significantly increase its financing costs, or prevent it from obtaining financings totally. All of these factors may increase in working capital requirements and if it experience insufficient cash flows to meet required payments on its working capital requirements, there may have an adverse effect on its financial condition, cash flows and results of operations.

Derive significant portion of revenues from Rice Bran Oil: The company derive a significant portion of its revenue from the sale of Rice Bran Oil. It manufactures, market and sell Rice Bran Oil under its own brands ‚ÄúTulsi‚ÄĚ and ‚ÄúSehat‚ÄĚ through thirty-eight (38) distributors who in turn sell to various retailers across Maharashtra. It also manufacture and sell Rice Bran Oil to FMCG companies like Mother Dairy Fruit & Vegetable, Marico and Empire Spices and Foods. For the nine months ended December 31, 2023 and Fiscals 2023, 2022 and 2021, its revenue from its Rice Bran Oil under its own brands and to other brands of leading FMCG companies on a contractual basis amounted to Rs 19,396.87 lakh, Rs 29,698.16 lakh, Rs 29,030.38 lakh and Rs 18,555.68 lakh 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 its revenue from operations, respectively. Consequently, any reduction in demand from the consumers of Rice Bran Oil or lack of preference for Rice Bran Oil could have an adverse effect on its business, results of operations and financial condition.

Outlook

Founded in 2008, Ramdevbaba Solvent stands as a beacon of innovation and sustainability in the agro-industrial sector. With three state-of-the-art Solvent Extraction Plants in Maharashtra, it specializes in producing high-quality Rice Bran Oil, De-Oiled Rice Bran cake, and various by-products, reflecting its commitment to quality and environmental stewardship. The company‚Äôs Manufacturing Facilities are situated near Nagpur, Maharashtra giving it the strategic advantage to supply and distribute Rice Bran Oil in Maharashtra and DORB across various states in India. It is the preferred partner for its FMCG clients for manufacturing Rice Bran Oil as it can be easily distributed to central and southern India from Nagpur.  On the concern side, the company‚Äôs earnings are to an extent dependent on the prices of the commodities that it sells mainly physically refined rice bran oil. These fluctuate due to factors beyond its control, including, amongst others, world supply and demand, supply of raw materials, weather, crop yields, trade disputes between governments of key producing and consuming countries and governmental regulation.

The company is coming out with an IPO of 59,13,600 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 80-85 per equity share. The aggregate size of the offer is around Rs 47.31 crore to Rs 50.27 crore based on lower and upper price band respectively. On performance front, the company‚Äôs total income has increased by 20.35% to Rs 70,433.41 lakh in Financial Year ended March 31, 2023 from Rs 58,525.46 lakh in Financial Year ended March 31, 2022 primarily due to overall increase in the revenue from operations. The company recorded an increase of 97.25% in profit after tax from Rs 659.15 lakh in Financial Year ended March 31, 2022 to Rs 1300.15 lakh in Financial Year ended March 31, 2023. Meanwhile, the company intends to set up corn de-oiling manufacturing facility, adjoining its exisiting manufacturing unit at Brahmapuri, which involves crushing and processing of grains like corn using a process called dry-milling. The company will enhance its marketing efforts to reach out to other districts in and around the Vidharbha region of Maharashtra and also expand into other neighbouring states like Madhya Pradesh and Chhattisgarh. 

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IDEAFPO 10 - 11 18000000000 1298 18-04-2024 22-04-2024
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