RJ Bio-tech is a newly listed company in Indian Stock Market .This stock listed in BSE’s SME platform on last Thursday.This is a pure play seed company listed in BSE after a gap of five years.Even if the size of company is small at present ,potential of the industry and the consistent growth it reporting since inception deserves a close look.RJB belongs to Aurangabad based RJ group having business interests in Agri and Hatchery related fields. This is the first listed company from this group . RJB producing a wide variety of seeds broadly classified into three categories – Vegetable seeds,Field Crops and Oil seed crops.
In each category ,company selling large variety of seeds like Cotton,Mustard,Sunflower,Wheat,Maize,Paddy,Bajra,Brinjal,Melons,Okra,Chilly,
Tomato,Cucumber,Onion,Spinach,Beans,Gourds..etc. ( For complete product list Click HERE ) .Such kind of a diversified portfolio not offered even by some front line seed companies in India.This much products helping the company to operate across different states in India according to the requirement of regional farming needs and preferences.Company claiming that they have already established a strong production, storage and marketing network across 10 states consisting of R&D lab,farm area of 55 acres for R&D experiments,700 seed growers and 3 seed processing facilities with an installed capacity of 14 MT per hour ,9 product testing points,40000 square feet storage facilities...etc. Company’s R&D facility at Pharola got the approval of Department of Scientific and Industrial Research,Government of India.RJB selling its products through more than 1000 dealers in these 10 states.Company effectively leveraging the marketing network of group company – Maruti Fertochem (production capacity 1,27,000 MT per annum ) -which is operating in fertiliser segment .RJB tied up with Mahyco Monsanto for its Bollgard II BT cotton variety and the product developed through this technology will be commercialised during the kharif season of 2014.Company entered into a marketing tie-up with Monsanto Holdings for marketing their Maize Hybrids.RJB signed an MOU with Directorate of Rice Research ( DRR) Hyderabad for commercialising Hybrid paddy developed by DRR across India which will happen in 2014-15
In each category ,company selling large variety of seeds like Cotton,Mustard,Sunflower,Wheat,Maize,Paddy,Bajra,Brinjal,Melons,Okra,Chilly,
Tomato,Cucumber,Onion,Spinach,Beans,Gourds..etc. ( For complete product list Click HERE ) .Such kind of a diversified portfolio not offered even by some front line seed companies in India.This much products helping the company to operate across different states in India according to the requirement of regional farming needs and preferences.Company claiming that they have already established a strong production, storage and marketing network across 10 states consisting of R&D lab,farm area of 55 acres for R&D experiments,700 seed growers and 3 seed processing facilities with an installed capacity of 14 MT per hour ,9 product testing points,40000 square feet storage facilities...etc. Company’s R&D facility at Pharola got the approval of Department of Scientific and Industrial Research,Government of India.RJB selling its products through more than 1000 dealers in these 10 states.Company effectively leveraging the marketing network of group company – Maruti Fertochem (production capacity 1,27,000 MT per annum ) -which is operating in fertiliser segment .RJB tied up with Mahyco Monsanto for its Bollgard II BT cotton variety and the product developed through this technology will be commercialised during the kharif season of 2014.Company entered into a marketing tie-up with Monsanto Holdings for marketing their Maize Hybrids.RJB signed an MOU with Directorate of Rice Research ( DRR) Hyderabad for commercialising Hybrid paddy developed by DRR across India which will happen in 2014-15
It is evident from the listing of this company in BSE SME that the current size of operations are small.But company established a good frame work in past few years and now it need to capitalise on that.It established a good infrastructure even though many of them are on a lease basis due to scarcity of working capital.Now the money raised through this IPO is proposed to be utilised mainly for working capital requirements. Even the size is small RJB is reporting steady growth since the beginning,which reported a CAGR of 78% in Sales from 2007-2008 to 2011-2012 and a CAGR of 110% in net profit in the same period. Its sales grow from mere Rs.90 lakhs in 2008 to Rs.16 Cr in 2012 and net profit shot up from Rs.1 lakhs to Rs.55 lakhs. Even its cash flow is negative at present,I hope it can be addressed if the promoters can show more professionalism going forward.
The potential of Seed Industry is robust in India and the entry barrier is very high.Any company needs minimum 4-5 years to commercialise a new variety of seed from R&D level after going through long experiments,assessment and approval from various government authorities ..etc.On this background company’s portfolio of 55 type hybrid seeds in 8 field crops and 16 vegetable crops is not a small thing.As I mentioned earlier If the promoters can capitalise the infrastructure they built and tap the potential of the Industry ,RJ Biotech may bring good reap to its investors.Stock is currently trading in BSE ( Scrip Code- 536456) under MT group .As per new listing norms ,stock will come out of trade to trade segment after the completion of 10 trading sessions .Current Market price is Rs.23
Link to company website HERE
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* Since it is a newly listed company , gathering information was not very easy .So some data taken directly from company published documents . So it may be biased.
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