Penny Stock Under Rs 5: Textile Stock Will Remain In Focus Next Week Due To THIS Business Update | Do You Own?

Penny Stock Under Rs 5: Shares of Nandan Denim will remain in focus on Monday, April 19, as the textile firm announced its entry into a renewable energy special purpose vehicle. The Ahmedabad-headquartered integrated textile manufacturer, on Friday, bought a small stake in a renewable energy special purpose vehicle.

Nandan Denim share price ended 1.89% higher at Rs 2.69 per share on BSE with a market capitalisation of Rs 387.76 crore on Friday, April 17. The stock had dipped to an intraday high mark of Rs 2.70 per share and an intraday low of Rs 2.62 per share.

Nandan Denim Acquisition Details

The Nandan Denim board of directors approved the purchase of a 6.1% equity stake in Opera Vayu (Narmada) Private Limited. Opera Vayu (Narmada) Private Limited is a special-purpose vehicle that is set up for renewable energy generation under the captive power framework.

Nandan Denim "considered and approved to enter into a Share Transfer cum Shareholders' Agreement with the Special Purpose Vehicle i.e. M/s. Opera Vayu (Narmada) Private Limited ("SPV"), and Shivman Wind Energy Private Limited (Promoter and Project Implementer) for the purchase of wind & solar power under the applicable captive power route and in this connection," read a BSE filing shared by the company on April 17.
The firm will acquire around 6.1% (out of 26% of user members) equity shareholding in the said SPV.

For this 6.1% stake, Nandan Denim plans to invest Rs 4,00,20,960. The company will buy 40,02,096 equity shares, each with a face value of Rs 10. The acquisition will be settled entirely in cash and has not been tagged as a related party deal under current regulations.

As per the BSE filing, Nandan Denim as a user member will source 4.3 MW of power from the project. The group captive plant has a planned capacity of 23.1 MW of wind power and 25 MW DC of solar power. Supply is intended for the company's Bareja plant in Gujarat.

"The Company has been exploring the possibility of increasing the Sourcing of Renewable Power to reduce the cost of power at its Bareja Plant. In this connection, the Company (User Member under the Captive Power Route) shall procure 4.3 MW Power out of 23.1 MW (Wind & 25 MW DC Solar) of Group Captive Renewable Energy Power Plant," the company said in the filing.

Under the arrangement, Nandan Denim will also issue an irrevocable bank guarantee worth Rs 1.90 crore. This guarantee is meant to cover power billing for a period of three months. The company expects access to wind and solar energy from the SPV at competitive market-linked tariffs for 25 years.