Preferential Allotment at 52 per cent Discount to Promoters and Ace Investors as Company Expands into the Data Center Sector

Ace investor Ashish Chug and Sageone Investment Managers (Samit Vartak) name appears in the non-promoter preferential allotment.

The Board of Directors of TCC Concept Limited (formerly known as Aaswa Trading and Exports Limited) held a meeting to discuss several significant matters. Here’s a comprehensive overview of the key decisions made and their implications:

The Board considered and accepted the valuation report of Natural Environment Solutions Private Limited (NES), determining the valuation at Rs. 461.03 crore. The acquisition will be executed through a share swap, where TCC Concept Limited will issue shares at Rs. 352 per share. Following this, NES will become a 100 per cent subsidiary of TCC Concept Limited.

The acquisition is classified as a related party transaction since the promoters and promoter group of TCC Concept Limited have interests in NES. They will acquire equity shares through the preferential issue by swapping equity shares. The acquisition price for NES shares is Rs. 2,90,048 per share, including a premium of Rs. 2,90,038 per share. This transaction is conducted at "arm's length" based on a valuation report from a registered valuer.

Strategically, NES operates in the data center industry, which aligns well with TCC Concept Limited’s business plans. The acquisition will help diversify and expand the company’s operations into the rapidly growing data center sector. Issuing new shares for the acquisition is expected to increase the wealth of shareholders and stakeholders.

The Board decided to increase the authorized capital from Rs. 25 crore to Rs. 40 crore, subject to shareholder approval and necessary amendments to the Memorandum of Association (MOA). The acquisition is expected to be completed within 15 days from the shareholder resolution date, contingent on receiving necessary regulatory approvals.

The shares will be issued at Rs. 352 per share. Considering the current market price (CMP) of Rs. 730.60, the shares are being issued at a substantial discount of about 52 per cent.  The stock has gained 3,763 per cent in the last one year, as a result, the stock has turned out to be a multibagger stock.

The preferential allotment includes both promoters and non-promoters. Umesh Kumar Sahay, Aditi Umesh Sahai and Hemlata Mahendra Singh falls under category of promoter and promoter group. Ace investor Ashish Chug and Sageone Investment Managers (Samit Vartak) name appears in the non-promoter preferential allotment.

To ensure compliance, the company will seek necessary approvals from BSE Limited and adhere to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The transaction and capital increase are subject to approval by the company’s members.

The acquisition of NES by TCC Concept Limited represents a strategic move to diversify into the data center industry, leveraging NES’s expertise and positioning in this sector. The preferential allotment at a discounted rate from the CMP is structured to benefit both promoters and non-promoters, aligning with the company’s broader growth objectives. This transaction is expected to enhance shareholder value and position TCC Concept Limited for future growth and expansion.

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