FII Backed Specialty Chemical Stock Below Rs 5 Likely To Raise Rs. 350 Mn Funds Via Warrants

Vikas EcoTech Ltd is a micro-cap company dealing in the speciality chemical sector. The company has notified the stock exchanges that a meeting of the board of directors will be held on August 31, 2023, to discuss a plan to raise 350 million rupees through equity, convertible instruments, and warrants.

"In terms of Regulation 29 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that the meeting of the Board of Directors of the Company shall be convened on Thursday, August 31, 2023 at the Registered office of the Company at 34/1, Vikas Apartment, East Punjabi Bagh, Delhi-110026, inter-alia, to issue of securities, convertible instruments on preferential basis to Mr. Vikas Garg, promoter of the Company, who signified his intent in writing to subscribe additional equity/convertible instrument/warrants, or any other combination thereof, in cash, at premium, for an amount not exceeding Rs. 350 Million," said Vikas EcoTech in a stock exchange filing.

Through a regulatory filing, Vikas Ecotech recently told exchanges that it had repaid debts of Rs 70 million. This reduces the entire bank debt to around Rs 650 million, and the overall bank debt shrinks to approximately Rs 62 million. It is important to note that, thanks to the promoters of the company's perseverance and support, the company has set a goal to become a fully debt-free organisation by the end of FY 2023-2024. After the repayment of Rs 70 million debt, the company plans to make an additional repayment of Rs. 100 million before the end of the current quarter, reducing the debt levels down to about Rs. 550 million and opening the path for it to become a debt-free company by FY 2023-2024.

Net sales for Vikas Ecotech Ltd in the June 2023 quarter were Rs 57.70 crore, down 34.95% from Rs 88.69 crore in the June 2022 quarter. In Q1FY24, its standalone net profit was Rs. 1.55 crore, which is a rise of 6.06% from Rs. 1.46 crore recorded in Q1FY23. While Vikas Ecotech's earnings per share (EPS) decreased to Rs. 0.01 in Q1FY24 from Rs. 0.02 in Q1FY23, EBITDA climbed to Rs. 5.28 crore in June 2023 quarter, up 4.35% from Rs. 5.06 crore in the year-ago quarter.

On Monday, the shares of Vikas EcoTech opened on the BSE at Rs 2.89 apiece during the pre-market session. The stock made a 52-week-high of Rs 4.13 on (21/10/2022) and a 52-week-low of Rs 2.38 on (28/03/2023). During Q1FY24, the company recorded promoters shareholding of 7.85%, FIIs stake of 15.18% and public stake of 76.98%.