The history of Riddhi Siddhi Gluco Biols Ltd. (RSGBL), promoted by Chowdhary family, is the one of adventure and innovation, of risks taken and bold decisions made.
The seeds of this successful corporate conglomerate were sown in 1990 in the name of Riddhi Siddhi Chemicals Pvt. Ltd. What followed was an unmatched series of innovations, achievements and accolades.
The company is 100% debt free.
DELISTING-:
Promoters had presented their intention to the company via letter dated 07.12.2017 and also had expressed intention to provide an exit opportunity to the public shareholders of the Company that is, Promoter would purchase the entire 17,96,634 Equity Shares of Rs. 10/- each representing 25.18% of the Equity Capital of the Company to voluntarily delist the Equity Shares of Riddhi Siddhi Gluco Biols Limited (RSGBL) from the stock exchange i.e. BSE
The resolution for the same was also passed, with the votes cast by the Public Shareholders in favour of the Delisting being more than two times the number of votes cast by the Public Shareholders against it to which Company has received in-principle approval for the proposed delisting of equity shares from BSE. But later BSE informed the Company on March 21, 2018 delisting process was put on hold as per directions of SEBI till further instruction.
To which further order was passed and in-principle approval granted by the Exchange to the proposed voluntary delisting of securities of Company had been withdrawn.
ASSETS/BOOK VALUE-:
The above statement can contain errors , therefore for more correct representation users are requested to check the annual report of the company.
Company had sold its core asset of business at around 1100 Crore Rs and later brought back shares from the shareholders at Rs 450 per share.
The company had also proposed floor price of Rs 510 for delisting its shares from the stock exchange.
As per the 2019 Balance Sheet the investment of the company in the stocks and mutual funds is valued at around 326 Crore Rs or approx. Rs 435 per share.
Given the current market situation if we assume 50% fall in value of all the share which is not the case but for prudence estimation the value comes at Rs 217 per share which is still higher than the current market price of the share.
Apart from that the company also has loans and advances of Rs 538 crores. Chances are those are mostly provided to the known associates or to say no expectation for the realisation of those loans should be expected or should be in any way taken into consideration while investing in the shares.
The total investments of the company stands at around Rs 727 Crore which would be approx. 969Rs per share.
However taking all the assets from the balance sheet into consideration the full book value of the company stands at around 1833Rs per share.
(The financials have not been presented due to significant size of the investments we believe financials are irrelevant to focus on.)
Conclusion-:
The management is desperate to buy back all its share so that they can be the sole owner of all the underlying assets of the company. However as seen from the above those efforts of management to buy 25% outstanding shares from the public has not been successful.
Currently promoters hold around 75% shares of the company. Chances are of remaining 25% holdings also, much of the holdings might have been cornered by the promoters. Therefore there is strong possibility of delisting.
Moreover due to legal reasons the company has not been able to go forward with the delisting process. Also the promoter of the company are very reluctant to increase shareholders wealth in any possible way as there has been no dividend payments of any kind.
The investors old and those who are investing newly are going to be stuck with this shares as there would be very little movement in the prices and due to extremely less free float and liquidity in the this script it may be very difficult to sell even small number of shares.
Therefore if you choose to invest in this stock make sure you are ready to forget the sum invested forever because chances of this stock giving any meaningful returns are very thin. However some passionate investors with extremely small amount to loose can explore this investment opportunity because what if the buyback does happen anytime in the future at significant higher amount.
What if????? Thats the most important fact to consider and it was total hypothetical . So invest at your own risk if you choose to invest. Please do not send us queries regarding this stock.
Once again , if you invest in this stock you are definitely going to be stuck with the stock since there would be extremely few chances of exit available given that you earn any profit.
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Additional Notes.
History-:
1993-94 Commenced manufacturing operations of Corn Wet milling plant at Viramgam (Ahmedabad)
1994-95 Liquid Glucose Plant at Viramgam (Ahmedabad)
1995-96 Acquired K.G Gluco Biols Ltd., Gokak (set up by Glaxo & KSIIDC)
1996-97 Addition of Starch Drying facility at Gokak
1997-98 Stabilization and balancing of operations at Gokak
1998-99 Increase in capacity of Maltodextrine at Gokak
1999-00 Addition of High Dextrose Syrup and increase in capacity of Dextrose Monohydrate and Liquid Glucose
2001-02 Implementations of 6 MW Captive Co-generation power plant
2002-03 Expanded crushing capacity of Gokak unit making it India’s largest corn wet milling Plant
2003-04 Addition of High Maltose Corn Syrup plant at Viramgam (Ahmedabad)
2004-05 Capacity enhancement of Liquid Glucose plant at Gokak
2005-06 Acquisition of Biopolymer Division from Hindustan Lever Ltd. at Pondichery Further expanded crushing capacity of Gokak Plant from 500 Tpd to 750 Tpd Roped in Roqette Freres of France as the Strategic business partner and investor Star Export House accreditation
2007-08 Commissioning of the unit-IV Pantnagar Plant
2008-09 Expansion of Viramgam Unit and setting up biopolymer plant in Gokak Unit
2009-10 Expansion of Pantnagar Plant. Decision to demerge the Corn Wet milling business, transfer it to a new company in Roquette can have majority stake and bring in new generation products.
2010-11 Decision to diversify into renewable energy business with main focus on setting up Wind Mills with a capacity of 33.15 MW to be located in Tamilnadu, Maharashtra and Gujarat.
2011-12 Completion of demerger process
Then why promoters are not buying from Market now since there is fall in share price. ? If they do then promoters cost of delisting will be reduced drastically.
In order to buy there must be someone to sell, plus as you can check the court/sebi has also put restriction on delisting. So to guess they are stuck currently.