Listed at BSE and belonging to Rama Group of Companies promoted by Mr. Ramsinghani, RPL was set up for producing Methanol. Its Plant is situated at Taloja and has capacity to produce 60,000 TPA of Methanol.
Currently, domestic demand of Methanol stands at 5 lakh tonnes. Domestic production is around 3.60 lakh tonnes and major manufacturers are Deepak Fertilizer, GNFC, RCF, NFL. RPL was forced to shut down its Plant as it became economically unviable to produce Methanol due to extremely high prices of furnace oil. However, if company produces Methanol by using Natural Gas, Methanol production becomes profitable. Due to shortage of Methanol around 1.40 lakh tonnes is imported every year. As a result, existing producers like GNFC, Deepak Fertilizer, are enjoying very high profit margins in Methanol business.
RPL is waiting for commencement of Natural Gas to its Plant. Same has been delayed due to ongoing dispute between RIL-RNRL. Once this court case is resolved, RPL should start getting gas soon thereafter. As per sources, company will most likely get gas from March/April 2009 onwards. Once commercial production starts, company should be reporting profits from first year of operations itself. Its Equity capital is 10.46 crs. Market cap is just Rs. 8.20 crs. Earlier, share price had gone upto Rs. 32/- which has come down heavily due to bad market conditions and many investors losing patience for gas supplies to commence. However, now, gas supply is bound to commence in next 3-4 months. Company is maintaining the Plant well by spending significant amount every year on its maintenance and hence, it can achieve high capacity utilization immediately. Investors with a time horizon of more than 6 months can buy this scrip.
Once commercial production starts, this scrip can give multibagger returns. Almost risk free at CMP 9.80.
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