Rajputana Industries Limited
Company
| Website 🔗 |  |
| Business Activity | Manufacture |
| Division | Recycled Metal Products |
| Sub-class | Non-Ferrous Metal rods and other products |
| Location | Reengus, Rajasthan |
| Establishment Year | 2011 |
Management
| Managing Director | Shivani Sheikh |
| Educational Qualifications | Bachelor’s of Engineering (Hons.) in Electrical from Ravishankar Shukla University, Raipur (M.P.) |
| Experience | Over 26 years of experience in the manufacturing of non-ferrous metal products |
| Annual Salary | ₹ 36 Lakhs |
| Total Number of Employees | 98 |
About
Rajputana Industries Limited is primarily involved in manufacturing various non-ferrous metal products, utilizing recycled scrap metal as its primary raw material. The company specializes in converting scrap metal into billets of aluminium, copper, and brass, which are then further processed into finished products such as rods, tubes, bus bars, and winding wires.
Products and Services:
Brass Rods:
These rods are used in various applications, including electrical connectors, automotive components, plumbing fittings, and decorative trims.
Raw Material for Bullet Shells:
The company manufactures special-grade brass rods suitable for making bullet shells for defence applications.
Copper Rods:
These rods find use in electrical wiring, power cables, transformers, plumbing systems, and renewable energy applications.
Aluminium Rods:
These rods are utilized in electrical wiring, power transmission lines, construction and infrastructure, automotive components, and the aerospace industry.
Copper and Brass Billets:
These billets serve as intermediate products for further processing into various copper and brass-based products like pipes, tubes, and electrical components.
Brass and Copper Wires:
These wires have applications in electrical and electronics, jewellery and accessories, automotive, aerospace, and other industries.
Copper Mother Tubes:
These tubes are used in electrical conductors, plumbing and HVAC systems, automotive components, and the renewable energy sector.
Super Enamelled Aluminium and Copper Conductors:
These conductors are used in motors, transformers, generators, and other electrical and electronic devices.
Clients:
Rajputana Industries Limited caters to a wide range of clients across various industries.
Electrical and Electronics Industry:
This sector extensively utilizes the company’s products for electrical wiring, power cables, transformers, motors, generators, and various electronic components.
Automotive Industry:
Rajputana’s products find applications in the automotive sector for manufacturing wiring harnesses, connectors, sensors, and other electrical and thermal management components.
Plumbing and Sanitary Industry:
The corrosion resistance and durability of the company’s products make them ideal for plumbing fittings, valves, faucets, and other sanitary applications.
Construction and Architecture Industry:
The construction sector utilizes these products for electrical installations, decorative trims, handrails, hardware, and fasteners.
Industrial Equipment Manufacturing:
Various components in industrial equipment, such as fasteners, bearings, gears, and connectors, are made using Rajputana’s products due to their strength, corrosion resistance, and machinability.
HVAC and Refrigeration Industry:
Copper tubes and pipes produced by the company are widely used in heating, ventilation, air conditioning, and refrigeration systems.
Renewable Energy Industry:
The company’s products, particularly copper components, are crucial in solar power systems and other renewable energy applications due to their high electrical conductivity.
Manufacturing Process:
Procurement:
The company sources scrap metal from open markets, ensuring a consistent supply of raw materials for its operations.
Recycling and Conversion:
The procured scrap metal is recycled within the company’s in-house manufacturing unit. This process involves segregating, grading, melting, and casting the scrap metal into billets made of aluminium, copper, or brass.
Product Manufacturing:
The manufactured billets are then utilized to produce a range of finished products, including copper rods, aluminium rods, copper mother tubes, brass wires, and super-enamelled copper conductors. These products are further customized into various shapes and sizes to cater to specific customer requirements and market demands.
Quality Control:
Rajputana Industries Limited places a strong emphasis on quality control. The company has an in-house laboratory equipped to conduct necessary tests to ensure that the final products meet stringent quality standards.
Raw Materials:
The primary raw materials used by Rajputana Industries Limited are:
- Copper scrap
- Brass scrap
- Aluminum scrap
Other Key Aspects:
The company holds quality certifications like ISO 9001:2015, ISO 45001:2018, and ISO 14001:2015, demonstrating its commitment to quality, safety, and environmental management.
The company is strategically expanding its product portfolio by venturing into cable manufacturing, targeting the construction and submersible motor industries.
Manufacturing Process Flowchart
Revenue – Category
Revenue – Region
Audit and Legal
Auditor’s Remarks:
The auditors’ remarks indicate that the restated financial information presented is a fair and accurate representation of the company’s financial position and performance, in accordance with the relevant accounting standards and regulations.
Non-Compliances and Other Issues:
Delayed Provident Fund Payments and Filings:
The company was late in paying and filing Provident Fund contributions for several months between 2015 and 2021.
Employee State Insurance (ESI) Delays:
The company faced delays in both payments and return filings related to ESI. This resulted in a penalty of Rs. 1,704 under the ESI (General) Regulations, 1950.
Goods and Services Tax (GST) Delays:
There were instances of delayed GST return filings, leading to late fees and interest payments.
Delayed Statutory Filings:
The company also incurred additional fees for late filings of various statutory forms with the Registrar of Companies.
Significant Dependence on Related Party Transactions:
For FY 2024, a substantial portion of the company’s revenue (51.33%) and purchases (45.98%) are derived from transactions with related parties, primarily its promoters, promoter group, and holding company.
Contingent Liabilities:
Rajputana Industries Limited reported contingent liabilities totalling Rs. 25.00 lakhs. These contingent liabilities are related to bank guarantees issued by the company.
Legal Cases:
Cases Filed Against the Company
Criminal Proceedings against Promoters:
Amit Dushad vs. State Government –
This case accuses the promoters of Rajputana Industries of abetment of suicide. A negative final report has been filed by the police, but a final disposal order from the court is pending.
Criminal Proceedings against Group Companies:
Employees Provident Fund Organization Vs. Shera Metal Pvt. Ltd. and Others –
This case is against a group company and its directors (including a promoter of Rajputana Industries) for the alleged violation of the Employee’s Provident Funds & Miscellaneous Provisions Act, 1952. The matter is pending adjudication.
Material Civil Litigation against Promoters:
Fatehpuria Transformers & Switchgears Pvt. Ltd. Vs. Shera Energy Pvt. Ltd. –
This case involves a dispute over delayed payment to a supplier by Shera Energy Limited in violation of Section 15 of the Micro, Small and Medium Enterprises Development Act, 2006. The matter has been referred to arbitration.
Outstanding Material Civil Litigation against Directors (other than Promoters):
Several cases are listed against directors, but the specific details and aggregate amounts involved are not ascertainable from documents available to the public.
Tax Proceedings against the Company:
SWOT Analysis
Strengths
| Established Manufacturing Facility: Rajputana Industries possesses a well-equipped manufacturing unit with modern machinery and an in-house quality control lab, enabling end-to-end production and stringent quality checks. |
| Strong Customer Relationships: The company has fostered long-standing relationships with its clientele, evidenced by the fact that its top ten customers have been associated with them for over a decade. This reflects customer satisfaction and trust in the company’s products and services. |
| Integrated Business Model: The company’s business model covers the entire value chain, from raw material procurement to sales and marketing. This allows for better control over processes, cost efficiency, and responsiveness to customer needs. |
Weaknesses
| Underutilization of Capacity: The company’s manufacturing facilities have historically operated below their installed capacity, indicating potential inefficiencies and missed growth opportunities. |
| Regulatory and Compliance Risks: The company faces risks associated with complying with complex and evolving environmental, health, safety, and labour regulations. Any non-compliance could result in penalties and operational disruptions. |
| Dependence on a Few Suppliers: A significant portion of the company’s raw material purchases comes from a limited number of suppliers, making it vulnerable to supply chain disruptions and price fluctuations. |
Opportunities
| Expanding Customer Base: The company is actively pursuing strategies to expand its customer base both domestically and internationally. This includes entering new geographical markets and diversifying its product offerings to cater to evolving customer needs. |
| Growing Demand for Non-Ferrous Metals: The increasing demand for non-ferrous metals across various industries, driven by factors such as infrastructure development, urbanization, and the growth of the renewable energy sector, presents significant growth opportunities for the company. |
| Government Initiatives and Policies: Favorable government initiatives and policies aimed at promoting manufacturing and infrastructure development in India could create a conducive environment for the company’s growth. |
Threats
| Intense Competition: The non-ferrous metal industry is highly competitive, with numerous players in both the organized and unorganized sectors. The company faces challenges in maintaining its market share and profitability amidst growing competition. |
| Fluctuations in Raw Material Prices: The prices of raw materials, particularly copper and aluminum, are subject to significant volatility in the global market. This could impact the company’s cost of production and profitability. |
| Economic Slowdown: A slowdown in the Indian or global economy could adversely affect the demand for the company’s products and its overall financial performance. |
Porter’s Five Forces1
| Threat of New Entrants | HIGH |
| The industry has low barriers to entry, with many small and medium-sized players operating in the unorganized sector. |
| Bargaining Power of Suppliers | MODERATE – HIGH |
| The company relies on a limited number of suppliers for a significant portion of its raw materials. Additionally, the prices of key raw materials like copper and aluminium are subject to global market volatility. |
| Bargaining Power of Buyers | MODERATE – HIGH |
| The industry is fragmented with numerous players, and price sensitivity is high. While Rajputana Industries has long-standing relationships with some customers, the overall bargaining power of buyers appears to be moderate to high. |
| Threat of Substitute Products or Services | MODERATE |
| The availability of substitute materials, such as plastics and other metals, for certain applications poses a moderate threat. The extent of this threat depends on the specific product and its end-use. |
| Rivalry Among Existing Competitors | HIGH |
| The industry is highly competitive, with numerous players vying for market share. Competition is based on factors like price, quality, and timely delivery. |
Peer Comparison
The company’s performance on various financial and operational metrics compared to its peers for FY 2024 is as follows:
| Particulars | Rajputana Industries Limited | Nupur Recyclers Limited | Baheti Recycling Limited |
| Revenue from Operations (₹ in Lakhs) | 32,650.56 | 18,081.81 | 42,934.29 |
| Growth in Revenue from Operations (%) | 28.21% | 82.93% | 19.27% |
| EBITDA Margin (%) | 5.56% | 8.18% | 4.76% |
| PAT Margin (%) | 1.57% | 5.83% | 1.68% |
| ROE (%) | 17.09% | 13.55% | 18.93% |
| ROCE (%) | 30.28% | 17.22% | 37.22% |
Green Box
IPO Funds:
Funding Working Capital Requirements:
The company plans to allocate a significant portion of the proceeds, Rs. 1400.00 lakhs, to bolster its working capital. This will enable the company to meet its day-to-day operational expenses, manage inventory, and support its growing business activities.
Purchase of Grid Solar Power Generating System:
Rajputana Industries intends to invest Rs. 450.00 lakhs in acquiring a 1000 KW on-grid solar power generating system. This strategic move aims to reduce energy costs, ensure a stable power supply, and demonstrate the company’s commitment to environmental sustainability.
Rajputana Industries Limited is actively pursuing capacity expansion through the establishment of a new cable plant within its existing manufacturing facility in Reengus, Sikar. The project, with an estimated total cost of Rs. 5.88 crores, will focus on manufacturing cables primarily for the construction industry, including residential and submersible cables for motors, and it is expected to be operational by the end of September 2024.
Success of R&D Efforts:
The successful development and launch of the special-grade brass rods for bullet shells demonstrate the tangible outcome of the company’s R&D initiatives. This new product has expanded the company’s product range and opened up opportunities in the defence sector.
Industry Outlook:
Domestic Consumption:
The Indian copper industry, although relatively small compared to the global market, is expected to grow due to increasing demand from sectors like infrastructure, real estate, telecommunications, electrical, renewable energy, and electric vehicles.
Growing Applications:
Aluminium’s lightweight, corrosion-resistant, and conductive properties make it suitable for various applications across industries like electrical, construction, automotive, aerospace, and renewable energy. The expanding use of aluminium in these sectors is expected to drive the growth of the aluminium industry in India.
Amber Box
Underutilization of Capacity:
The company’s manufacturing facilities have historically operated below their installed capacity. While recent improvements have been made, this underutilization suggests potential inefficiencies and missed growth opportunities.
Negative Operating Cash Flow:
Rajputana Industries Limited had a negative operating cash flow in FY 2023. However, the company did achieve positive operating cash flows in FY 2024 and 2022.
Red Box
Economic Conditions:
Both the company’s and the industry’s performance are susceptible to domestic and global economic changes.
Lower Profitability Margins:
Rajputana Industries exhibits low EBITDA margin, and PAT margin. The company’s reliance on copper and aluminium scrap as its primary raw materials exposes it to price volatility and potential supply chain disruptions in the global commodities market which can quickly erode its profits.
Very High Related Party Transactions:
The company’s revenue (51.33% in FY 2024) and purchases (45.98% in FY 2024) are derived from transactions with related parties, primarily its promoters, promoter group, and holding company. Considering the size of transactions it becomes crucial to evaluate the fairness of those transactions on a regular basis to assess the company financials.
Images
- The force value of “LOW” is considered good Click Porter’s Five Forces article for more information. ↩︎
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