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Gujarat-based Riddhi Siddhi Gluco Biols Ltd (BSE: 524480) is looking for acquisitions.
It is open to acquiring any business other than infrastructure and chemicals, but prefers agro foods and warehousing, a senior official of the company told Business Line today.
Riddhi Siddhi has been in the business of manufacture of corn-based starch products. It had a range of 40 different products. But exigencies of business caused it to demerge its main business, spin it off into a wholly owned subsidiary and sell off the subsidiary to Rouquette Freres of France.
This process formally got over in July. As a result of this divestment, Riddhi Siddhi is now left only with its 34-MW wind farm business, but is also richer by Rs 990 crore.
A better part of this amount is meant to be used for acquisitions, the official said.
In its annual report for 2010-11, the company’s Managing Director Ganpatraj Chowdhary notes that corn business would inevitably gyrate towards multinationals.
“Some global giants in our space own no less than 700 products. In our estimation, the Indian market will graduate to the use of a larger number of sophisticated corn starch products, the know-how of which we do not possess. Consequently, there would have been an increasing preference to work with international majors, which would have gradually eroded our business relevance. This trend would have gradually reduced us from a leading player in the Indian corn starch space to a marginal participant,” says Chowdhary.
Sale proceeds
What he says about how the company proposes to deploy the proceeds of the sale is instructive. He speaks of repaying debt (Rs 135 crore long-term, and Rs 81 crore short-term).
But more importantly he says: “We will utilise a part of the inflows to reward our shareholders with a special dividend.”
Business Line learns that the company’s board meeting that took place on Thursday was a marathon one, which ran for many hours, but there was no decision on a ‘special dividend’.
On the BSE today, the Riddhi Siddhi shares were currently quoting at around Rs 306, which was around Rs 20 lower than the previous close.
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