Raghav Productivity Enhancers Limited (RPEL) caught investors’ eye when some of the big names led by Ramesh Damani and Mukul Agarwal invested in the company under preferential allotment; and as if it was not enough, entered in the den the big bull Rakesh Jhunjhunwala. After that, there was no looking back. The stock has so far, if one counts from its listing on SME platform and then migration to the mainboard, till date has rewarded its loyal investors almost 2,700 per cent return in six years.

Now, what attracted the attention of these big boys? After all, they are not just any investor. They dive deep only when they know, they’re in deep water and they can harvest fig fish. After prolonged market research, management meetings, and ensuring transparency they also evaluate the management capability, their dedication, and most of all enthusiasm to fly higher and higher.

And enthusiasm and passion were the two elements the Indian Economy & Market Team found in abundance when it caught its Managing Director, Mr. Rajesh Kabra, last week in his Jaipur office on a late sultry evening. He shared the uniqueness of the company and his future plans. Mr. Rajesh Kabra is also associated with many charitable organisations and is very active in different capacities on industry bodies. Along with his co-promoter Mr. Sanjay Kabra, the duo has been effectively redefining industry norms.

“We aim to be a futuristic company maintaining the global player tag that we have”

Raghav Productivity Enhancers Ltd

Please tell us about the journey of the company so far? 

We were engaged since 2009 in the manufacturing, supply, and export of silica ramming mass material before the Company was converted into a Public Limited in 2015. So we have many years of experience in different verticals of the ramming mass business. We established our first manufacturing Unit in Kaladera industrial area with the object of manufacturing Quartz Powder, which is called Ramming mass with a capacity of 15000 tonnes per annum. Then in 2015, we established a fully automated plant at Newai. The plus point, our plant in Newai is located in the High-Quality Quartz Mining area of Rajasthan which aids us in leading the markets by offering premium grades. Presently, we manage to produce 1,44,000 tons per annum. We’ve begun work on expanding production capacity by 108,000 TPA through another project executed via our subsidiary, adjacent to our existing plant taking total capacity to 288,000 TPA. On this, we are investing `45 crore and it will be equipped with advanced and modern technology, expected to be functional in a year.

But I must mention here that on the customer’s demand when in 2003 we manufactured the first lot of around 300 tonnes of Ramming mass, it was outrightly rejected by them due to its poor quality. We were flabbergasted but determined to succeed. Then we started our research; we went to many countries to understand the process, the raw material selection norms and came back with the mantra that to make a mark we need to manufacture customized products. One single quality will not suit all because their requirement is different. We set up an automated plant – right from unloading of raw material to finished product’s loading in the truck, every process is automatic. Customized product nobody manufactures in the world except us. At present, we serve around 210 customers, including 30 based overseas, with varying specialty demands. We directly supply them, no middleman, and no distribution network.

Please tell more about the product?

The company, as I said, is engaged in the business of silica ramming mass material. We offer white silica sand, casting powder, white ramming mass, premixed ramming mass, quartz silica ramming mass, etc. Our product is widely used as refractory material in induction furnaces. Basically, we offer customized lining solutions for secondary steel producers and foundries. We enable non-linear productivity growth and a massive reduction in power and overhead costs by at least 5 times its own cost. Thus the company product is very profitable for its clients.

You are attracting suddenly a lot of big names.

It was not sudden. We became public when we brought our IPO in April 2016 at an issue price of `39 through the BSE SME platform. The stock migrated to BSE main platform in October 2019. Now we are the world’s largest manufacturer of Silica Ramming Mass having a fully automated plant. Right from the beginning when we became public our uniqueness has attracted investors. We’ve many renowned global and domestic steel manufacturers and foundries as our customers. In fact, presently, RPEL is the only listed and organised ramming mass manufacturing company in India. Before us, in this segment, there was just one big-name Tata Refractories, which is not listed and produces just 3000 tonnes per month. We produce 14000 tonnes per month right now. The market is huge and demand side there is no issue.

So even being the number one manufacturer of Ramming mass, we still have just 10% market share of the domestic market and establishing our presence in export markets. Therefore we are expanding our capacity. Imagine a company with a turnover of just `63 crore is planning for multiple rounds of CAPEX– because we are confident with our product line and our capabilities.

To maintain the unique quality you must be having a great R&D team? 

We emphasize greatly the value of unrelenting research and development. Our investment in automation technologies, aids in bettering the quality of products. It is, in fact, due to that reason we are considered a pioneer in manufacturing value-added products. We offer high-value and cost-effective leadership in our focus segments and have the distinction of having filed multiple process patents. Nobody in the world produces from the particular process that we follow and to patent that we filed papers 4 years back, hopefully soon we’ll get the patent certificate.

Our R&D center is recognized by the government of India’s DSIR which itself is a great achievement as hardly 1200-1300 companies are on their list, mostly from the pharma sector. I’m sure none from the mineral metal sector except us. The rules and parameters of DSIR are very stringent.

Our Research and development department is operated by a group of researchers who guides professionals in making customizable ramming mixes as per exact specifications given by the client. They maintain the standard of our products as per international norms and specifications. Our infrastructure is equipped with state-of-the-art technology and our team of workers is experienced and skilled in their related fields. On these strengths, we always introduce ourselves as a company that provides 25 to 50% extra lining life in induction furnaces. And our product further aids in saving great amounts of money on energy consumption.

Being number one in the world needs a lot of planning. How do you score over others?

You are right, it’s a tough task. You have to manufacture a product that has universal acceptability in terms of price, quality, and service. These three have to be maintained on a regular basis uninterrupted. But having been in the industry for a long, we have a well-built infrastructure and years of rich experience. We have the best minds in the industry working for us and experienced hands to assure timely delivery. The well-built network and transportation system help us in timely delivery of the products to our customers spread all over the world.

As our name suggests, we save energy and enhance productivity. Say, a firm using its full capacity is producing 10,000 tonnes steel in a month; when the company starts using our product it surely produces 11,000 tonnes having the same capacity. Thus we enhanced its capacity by 1000 tonnes. The firm is happy with extra production with a saving of 3-4 per cent on electricity consumption. Although we charge a premium price on our product customers are happily buying because our value-added offer is something no one can give them. With just 0.2 per cent cost of steel production, they get huge benefits.

The Ministry of Power, Government of India has also recognized us by giving us National Energy Conservation Award, which is given to industries and establishments that have taken special efforts to reduce energy consumption, efficient utilization, and its conservation. The Government of Rajasthan in 2018 has also recognized our efforts by bestowing on us its Udyog Ratna Award which comes with a cheque of rupees one lakh. Then “India’s Best Company of the Year,” “Asia’s Most Trusted Company,” BSE’s “One of The Top Performer Award” etc are also in our kitty. The list is too long to mention here.

What are the future plans, any new venture? 

Right now we manufacture Ramming mass and Refractories Products; we provide the finest quality Acidic Premix Ramming Mass, Neutral Ramming Mass, Ramming Mass Powder, Silica Ramming Mass, Casting Powder, etc., and a lot more. But we are a futuristic company with a mission to always stay ahead. Secondly, our aim is to be a global player which you know is not an easy task.

The new product, yes, we have one. With an in-house developed technology, we have already commenced production of Tundish Board which is a product that helps us utilize the waste that we get from the ramming mass plant. We are also developing products through quartz processing being used in varied industries.

About the new venture, I can say, we have started in foundry line also. Unlike big capacity induction furnaces foundries have smaller size furnaces, like 200 kg, 500 kg, or one tonne following different processes for MS, alloy, and stainless steel, so they need different products and their demand is less. To cater to them we have to follow dealer distribution network. In this segment, some of the world’s biggest companies have approached us for the association.

Do you have anything to say to your investors?

What can I say? The day company became public I turned from an owner to a caretaker of the company. My job is to make sure the investors get the best possible comparable return on their investment. To achieve that we are following the best business practices available, using the finest ultra-modern technology to make premium products so that all of them are translated into a multifold profit realization. Last FY our sale was `63 crore whereas this FY in the 6 months itself we have clocked a sale of `45 crore. So even on a conservative basis if we maintain this we can record sales of `90 crore. The same goes for profit. The profit we generated in the whole last FY we have already achieved in the 6 months. Thus the potential is huge, and it will get bigger when our new plants start functioning.

  • BSE Code: 539837
  • Face Value: 10
  • 52 Week H/L: 1008.50 / 145
  • CMP: 733
  • Marketcap: 775 crore

The Big Catalyst for Future Growth: Promoters hold 69.61 per cent out of a total of 1,08,00000 shares. The company came out with a preferential issue in February this year in which 10 HNIs participated – all who’s who, like Prateek Kela, Ramesh Damani, Mukul Agarwal, Prakash Industries; Welspun and Bangad Group, etc leaving insignificant holding with the public.  Recently Rakesh Jhunjhunwala has invested `30.90 crores through unsecured compulsory convertible debentures. The 6 lakh CCDs at `515 CCDs allotted to him is by way of a preferential issue on a private placement basis. These CCDs will be converted into equity shares at the end of 18 months from the date of allotment. Remember, the big boys ensure before investing the company’s product line, its market and competition, corporate governance, and of course the ethical work culture. This speaks a lot about the future of the company.

About the author: IE&M Team
IE&M Team
Indian Economy & Market is an Indian media and information platform producing data-backed news and analysis on all the vital elements at the intersection of the economy, stock markets, mutual fund, insurance, commodities, currency, technology, startups and business.

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