Detailed Rationale

Crisil Ratings has placed its ratings on the bank facilities of Riddhi Siddhi Gluco Biols Ltd (RSGBL) on 'Rating Watch with Developing Implications'.

 

On January 19, 2026, the Riddhi Siddhi group signed an agreement under RSGBL to acquire a corn milling plant from Cargill India Pvt Ltd (rated ‘Crisil A1+’). The proposed acquisition is strategic in nature and aligns with the company’s objective to diversify its asset base and operational capabilities. As per the agreement, the company will acquire the plant and machinery having installed capacity of 3,00,000 tonne per annum (TPA). This will increase the group’s total milling capacity from 6.55 lakh TPA to 9.55 lakh TPA. The purchase is subject to due diligence and receipt of necessary licenses and clearances. The acquisition should be completed in the next 5-6 months.

 

The company has not yet disclosed the acquisition price and has informed that it being finalized subject to due diligence. The company is exploring various options including liquidating existing investments, raising debt etc to fund the proposed acquisition and the same will be a key monitorable.

 

Crisil Ratings will continue to monitor progress of the transaction and will resolve the Rating watch on receipt of regulatory approvals and successful completion of transaction. Crisil Ratings will engage with RSGBL’s management to better understand the final acquisition price, terms of funding for the transaction as well as expected improvement in business risk profile with increase in scale of operations and profitability that post completion of the transaction.

 

The ratings continue to reflect stable operations of RSGBL, Shree Rama Newsprint Ltd (SRNL) and Bluecraft Agro Pvt Ltd (BAPL), together known as the Riddhi Siddhi group, the extensive experience of the promoters in starch and maize trading business and healthy financial risk profile. These strengths are partially offset by exposure to counterparty risk associated with inter-corporate deposits (ICDs), shut down of the paper manufacturing facility and susceptibility to maize prices. The underlying acquisition is expected to further strengthen RSGBLs position in the corn milling and starch derivatives industry. The quantum of transaction, incremental capex, and means of funding and its impact on the business and financial risk profile of the company will remain monitorable.

Analytical Approach

For arriving at its ratings, Crisil Ratings has applied the homogenous criteria and combined the business and financial risk profiles of RSGBL, SRNL and BAPL. The other associate companies have not been considered for arriving at the ratings due to no significant business linkages with these entities.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths

Extensive experience of the promoters

The group is promoted by the Chowdhary family which have more than four decades of experience in the maize starch industry. RSGBL initially used to manufacture starch and starch derivatives. The division was sold to Roquette India Pvt Ltd for ~Rs 950 crore in fiscal 2012 and the company entered a non-compete deal. As a result, RSGBL entered trading, power generation, bottling and kraft paper manufacturing businesses. Post expiry of the non-compete deal with Roquette Feres in 2017, the group re-entered the starch business through BAPL and now has capacity of 1,875 TPD. In this short period, the company achieved operating income of Rs 1,990 crore with earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 6.1% in fiscal 2025.

 

Stabilisation of operations in BAPL, backed by diversified customer profile

In 2018-19, BAPL expanded the Yamunanagar plant capacity from 200 TPD to 750 TPD. In the first nine months of fiscal 2025, the capacity was further increased to 1,875 TPD in phase manner with utilisation above 70% while reaching the operating margin of 8% in the medium term. This is a result of its established relationships with customers who have been associated with the company for 20-30 years. The company has good customer diversification with top ten customers accounting for only 35% of total sales and exports forming 16% of total sales in fiscal 2025. Though exports are inclined to South-East Asian countries, the company also has presence in Africa, UAE and Mexico.

 

The proposed acquisition will increase the capacity by over 50% and will increase the group’s market share in starch segment. It will further diversify the product profile as the plant manufactures maltodextrin, liquid glucose, and co-products like corn germ, corn gluten, and corn fiber.

 

Comfortable financial risk profile at the group level

The financial risk profile of the group will remain comfortable over the medium term, supported by adequate cash accrual and healthy debt protection metrics. Consolidated debt has slightly increased to Rs 746 crore as on March 31, 2025, from Rs 710 crore as on March 31, 2024, owing to working capital requirement. Gearing and total outside liabilities to tangible networth ratios were healthy at 0.43 time and 0.57 time, respectively, as on March 31, 2025. The interest coverage ratio and net cash accrual to adjusted debt ratios should improve from 2.38 time and 12% in fiscal 2025, to over 4 times and 20% in the medium term, marked by steady accretion to profit and reduction in debt.

Key Rating Drivers - Weaknesses

Exposure to counterparty risk associated with ICDs

ICDs worth Rs 383 crore have been extended to unrelated and undisclosed parties as on March 31, 2025. As the credit profile of these entities remains unknown, the company remains exposed to counterparty risk. Reduction in ICDs to external parties and loans provided to group companies will remain monitorable.

 

Susceptibility to project risk and raw material prices

The company has recently completed the capex in Yamunanagar plant wherein capacity increased from 1,000 TPD to 1,400 TPD. In fiscal 2024, capex in Telangana plant is ongoing where capacity increased from 200 TPD to 350 TPD and rice-based starch with the capacity of 125 TPD is established. Stability of operations and capacity utilisation will be monitorable.

 

Maize, being an agricultural product and the key raw material for starch production, remains exposed to change in climatic conditions, government policies and other factors, which could have a potential impact on the company's operating margin.

Liquidity Adequate

The Riddhi Siddhi group has adequate liquidity driven by expected annual cash accrual of over Rs 100 crore against yearly debt obligation of Rs 70-90 crore over the medium term. The group also has access to fund-based limit of approximately Rs 420 crore (Rs 380 crore in BAPL and Rs 40 crore in RSGBL), which was utilised at 77% on an average over the six months through June 2025.

Rating sensitivity factors

Upward factors

• Substantial increase in revenue while maintaining profitability above 10% on sustained basis
• Higher-than-expected decline in debt, driven by prepayment, leading to improvement in debt protection metrics

 

Downward factors

• Decline in operating margin below 5% on sustained basis
• Higher-than-expected, debt-funded capex or acquisition, leading to weakening of debt protection metrics

About the Company

RSGBL is promoted by the Ahmedabad-based Chowdhary group having decades of experience in marketing starch and starch products in India. However, in 2011-12 the corn wet milling business was transferred to Roquette Feres. The wind energy segment was retained in RSGBL.

 

The total capacity of windmills stood at 31.65 megawatt (MW) in Tamil Nadu (30 MW) and Gujarat (1.65 MW). Energy generated from the windmills was sold to the respective state distribution companies. Total energy generated during the year under review was 31.44 million units against 25.71 million units in the previous year yielding revenue of Rs 1,018.69 lakh against Rs 862.41 lakh in the previous year.

 

Starch and its by-products manufactured by BAPL are used in varied industries such as pharmaceuticals, food, paper and boards, textiles and animal nutrition. The company procures maize from Madhya Pradesh, Telangana, Punjab, Haryana, Uttar Pradesh and Bihar during the two harvesting seasons, rabi and kharif. The company has a total storage capacity of 50,000 TPD (owned) and leased a total of 36 warehouses in Bihar, Madhya Pradesh and Odisha with cumulative maize crushing capacity of 4.9 lakh TPD.

 

SRNL had no production in the paper division during fiscal 2023, as against 63,000 TPD (48% capacity utilisation) during fiscal 2022. The paper division was shut down from December 18, 2021, for want of coal and later, due to rise in rates of wastepaper and coal. The company retrenched all workmen in the paper division with effect from February 17, 2022.

 

SRNL also manufactures packaged drinking bottles under the brand Clear on behalf of Energy Beverages Pvt Ltd. The company produced 42.37 lakh cases (1520.28 lakh bottles) during fiscal 2025 against 45.44 lakh cases (1,658.70 lakh bottles) in the previous fiscal.

Key Financial Indicators (Riddhi Siddhi Group)

As on/for the period ended March 31	Units	2025	2024
Revenue	Rs crore	1990	1523
Profit after tax (PAT)	Rs crore	-10	49
PAT margin	%	-0.49	3.24
Adjusted debt/adjusted networth	Times	0.43	0.41
Interest coverage	Times	2.38	3.62

Crisil Ratings-adjusted financials. Impairment losses of Rs 75 crore have been recognised as an exceptional item.

 

Key financial indicators (RSGBL)*

As on / for the period ended March 31	Units	2025	2024
Revenue	Rs crore	136	269
Profit after tax (PAT)	Rs crore	-12	44
PAT margin	%	-9	-16.3
Adjusted debt/adjusted networth	Times	0.06	0.04
Interest coverage	Times	9.17	9.87

* RSGBL consolidated with SRNL. Crisil Ratings-adjusted financials. Impairment losses of Rs 75 crore has been recognised as an exceptional item.

Any other information: Not applicable