Penny stock under Rs 5: Heavy buying witnessed as company announces 66 per cent debt reduction in just 24 months; scrip hit 20 per cent upper circuit!

From 0.36 per share to Rs 3.95 per share, the stock gave multibagger returns of over 1,000 per cent in 16 years.

Vikas Ecotech Ltd is primarily engaged in the business of manufacturing Specialty Chemicals focused on Additives and Specialty Polymer Compounds. The company announced that they have re-paid another Rs 50 million to the bankers as part of its pre-defined debt reduction program wherein it targeted to make the business debt-free by March 31, 2024.

The company had set a goal to be a debt-free business by March 31, 2024, and in due compliance with the targeted amount in Phase 1 of the Debt Reduction Program which was initiated in August – September 2021. The Company has re-paid Rs 1,052 million to the bankers since then; thus, reducing the total bank debt from the peak of Rs 1612 million approx. to about Rs 550 million currently, making a 66 per cent reduction from the peak level within 24 months of initiating the process.

Earlier, the company allotted up to 10,00,00,000 compulsorily convertible warrants (Warrants), for cash, to Mr Vikas Garg, Promoter and Managing Director of the company, who signified his intent in writing to infuse funds for the company’s growth, on a preferential basis at an issue price of Rs 3.40 per warrant, aggregating amount of up to Rs 34,00,00,000.

On Friday, one of the Top Gainers on NSE, shares of Vikas Ecotech Ltd surged 20 per cent upper circuit to Rs 3.95 per share from its previous closing of Rs 3.30. From 0.36 per share to Rs 3.95 per share, the stock gave multibagger returns of over 1,000 per cent in 16 years.

The company has a market cap of Rs 440 crore and reported positive numbers in its Quarterly Results and annual results. Investors should keep an eye on micro-cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.