Vikas Ecotech Shares Rally As Board Okays Consolidation Proposal With Vrindaa Advanced Materials

The shares of Vikas EcoTech were trading with an upside gap of 0.85% at Rs 3.57 during the afternoon trades on Monday after the stock kicked off at Rs 3.41 per share on BSE. The stock price surged following the company's Board of Directors' consideration and in-principle acceptance of the company's consolidation plan with Vrindaa Advanced Materials Limited.

"The Board of Directors of the Company held on Monday, October 16, 2023 at the Registered Office of the Company at 34/1, Vikas Apartments, East Punjabi Bagh, Delhi-110026, inter-alia, considered and granted in-principle approval for evaluating consolidation proposal of the company with Vrindaa Advanced Materials Limited, a company incorporated under Companies Act, 1956 with Corporate Identity Number: U51100DL2007PLC168941 ('VAML') and appointed Price Waterhouse & Co LLP (an individual member firm of the network of member firms of PricewaterhouseCoopers International Limited (PwC IL), a Big4 Advisory Firm for the evaluation of consolidation proposal from tax and regulatory perspective," said Vikas EcoTech in a stock exchange filing on Monday.

Incorporated in 2007, Vrindaa Advanced Materials Limited (VAML) has its headquarters in New Delhi, a production site in Vigyan Nagar, RIICO Industrial Area, and a trading operation for agricultural products in Shahjahanpur, Rajasthan. It reported a total income of Rs. 1925.10 Million and a net profit of Rs. 93.50 Million for the fiscal year that ended on March 31, 2023.As of March 31, 2023, the firm has no debt and a net worth of Rs. 691.40 million.

"Intended consolidation is considered to fortify Vikas Ecotech's positioning in its industry matrix and to drive out rivals from its operating market. The proposed consolidation will enable expeditious, strategic investments beyond individual company's structure which will advance efforts towards further business expansion and increased profitability and stronger balance sheet," said Vikas Ecotech in a regulatory filing.

"The board believes that such consolidation would create a larger and stronger entity, subject to statutory, regulatory and other approvals including relevant third-party consents. This will help to pool in the experience, expertise, resources and client base of the two companies. The proposed consolidation shall result in streamlining of operations and cost efficiency and together with the combined clientele of both the companies, is likely to result in accelerated business growth," the Board of Directors of Vikas Ecotech informed stock exchanges.

A small-cap firm operating in the specialty chemicals sector is Vikas Ecotech. Its products meet a wide range of requirements in a variety of international industries, from agriculture to automotive, cables to electrical, hygiene to healthcare, polymers to packaging, and textiles to footwear.