Riddhi Siddhi Gluco Biols Ltd.

Message

   To rivisit your debt part of the query, One needs to understand the reason why this high debt is there in the books. If you see their plants of Gokak, Viramgam and Pantnagar, they are world-class plants and best in Asia. In last many years they have invested heavily to ramp up capacity as well as build best quality plants. Their vision is to become largest cornstarch player in asia and this they can do it only with pace. 

They have taken debt route of financing rather than diluting equity heavily and with this investors and analysts should be happy rather than concerned. Yes - concern should arise if they are not growing topline at brisk pace but this is not the case as Riddhi has been growing topline and therefore capturing market-share briskly since last many years. 

Now, the time is ripe to get fruit of all the investments Riddhi has made since last many years and the high debt will now start coming down at brisk pace from now on because of healthy internal cash generation as well as french cornstarch major taking equity stake in the company for an amount equivalent to current debt. This will add straightaway to bottomline which will rerate the stock significantly in the near future. 

Rgds.
Mahesh

Originally posted by hit2710

Maheshiji, 

What would you consider the risk factors for RSGB? 

First thing that comes to mind is rise in raw material price esp maize. Would it be pass through? 

And what would be the current debt of the company? I saw the last four quarters and the interest payment seems to be reducing. 

regards