K S Oils is a leading integrated edible oil company and is the trusted name behind renowned brands like Kalash, Double Sher, K S Gold, among others. Their consumer brands and products in mustard oil, soybean oil and palm oil are a household name with Indian consumers who use our oils regularly as a healthy cooking medium. A leader in mustard oil in India, K S Oils today enjoys 11% market share in the overall mustard oil segment with a dominant 25% market leadership in branded mustard oil. Natural Resources Pte. Ltd. (KSNR), Singapore is a subsidiary of the company which is one of Asia's fastest growing agri-focused conglomerates, with diverse interests in agri-commodity trading, export and import of edible oils, oil palm plantation cultivations. India is the fifth largest producer of major oilseeds in the world while the domestic edible oil market is estimated at USD 15 billion. There has been an increase in trend of consumer shift towards branded/packaged oil. Branded oil segment in India is annually growing at the rate of 20%, with sunflowers and soy oils leading the market. The oil seed deficit in the Indian market with the ongoing shortage in production together with strong demand growth has made the government reduce duties on crude edible oils, a process which Fitch believes is likely to continue.KS Oils has recently acquired 53,000 acres of land for palm oil plantations in Indonesia in addition to the already existing 85,000 acres. The company is going into backward integration and has planned an expenditure of Rs. 380 crores on the land to develop the plantation over the next few years. This is the biggest by any Indian company and it also reflects how futuristic KS Oils is about the oil business and its growing demand among the Indian consumer. The funding for the acquisition would be done by the subsidiary firm in Singapore which means that there would be no further debt raised or equity diluted resulting sustained value for the shareholders.There had been a recent Rs. 450 crore equity infusion in the company out of which Rs. 375 was used for developing palm plantations in Indonesia and the remaining Rs. 75 crores in the Haldia refinery for increasing the plant production from 500 to 1,000 metric tonnes per day. All the recent acquisitions relating to Haldia port for Rs. 125 crores and agri-assets in South East Asia with an investment of Rs. 2300 million over three years reflects that the company is ready to meet the expected growth in demand in the future.The recent purchase of 27 lakh KS Oils shares by Goldman Sachs Investments Mauritius on the NSE is proof enough of the potential growth Goldman Sachs has seen in the company. There have been recent allegations on the company relating to stock price manipulation and insider trading. The stock prices have also taken a plunge due to this. But we think that a company of KS Oils’ repute and integrity will not react to these allegations for long.
