Penny stock under Rs 5: This recycling company allotted 38,03,50,000 equity shares at 20:1 ratio for acquisition of Shamli Steels Pvt Ltd at Rs 160 crore; details inside!

The stock is up by 57 per cent from its 52-week low of Rs 2.38 per share.

Vikas Ecotech Limited, a recycling company, is issuing 38,03,50,000 (thirty-eight crore three lakh fifty thousand) equity shares with a face value of Rs 1 each at a price of Rs 4.20 per share (including a premium of Rs 3.20) to acquire 100 per cent stake in Shamli Steels Private Limited. This preferential allotment aims to swap Vikas Ecotech shares for Shamli Steels shares at a ratio of 20:1, meaning existing Shamli Steels shareholders will receive one Vikas Ecotech share for every 20 they surrender. The total enterprise value of Shamli Steels Private Limited is Rs 160 crore.

Additionally, Vikas Ecotech Ltd completed its acquisition of Vikas Organics, a plasticiser manufacturer, for a total of Rs 32 crore. This expands Vikas Ecotech's product portfolio for their existing vinyl processing customers and opens doors to new markets in electrical cables, footwear, and furniture due to the wide range of materials produced by Vikas Organics. Vikas Ecotech plans to further invest Rs 75 crore to upgrade the acquired facility and develop new eco-friendly plasticizers.

Vikas Ecotech Ltd., a leading New Delhi-based manufacturer of speciality polymers, additives, and chemicals, caters to a diverse range of industries like agriculture, infrastructure, packaging, and more. Notably, they are the sole Indian producer of Organotin (used for heat stabilization in vinyl) with in-house R&D capabilities, placing them among a select few globally who possess the expertise to create this material from scratch.

The company is actively expanding its business and product portfolio, recently acquiring a plasticizer manufacturing business for Rs 27 crore in cash. Vikas Ecotech also entered the infrastructure development market in FY 2021 - 2022, supplying steel to construction companies in northern India.

The company has a market cap of Rs 480 crore. The stock’s 52-week high is Rs 5.63 and its 52-week low is Rs 2.38. The stock is up by 57 per cent from its 52-week low of Rs 2.38 per share.  

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