Penny stock under Rs 5 to raise up to Rs 34,00,00,000 by allotting convertible warrants to promoter for company’s growth; do you own it?
From 0.19 per share to Rs 3.03 per share, the stock gave multibagger returns of over 1,495 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 informed that the Board has approved the following businesses:
Increase in Authorised Capital: Increase the authorized share capital of the company to Rs 200 crore, to accommodate the present and future fundraising, if any, and consequent alteration in the capital clause of the memorandum of association of the company
Preferential Allotment to Promoters: To allot 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 preferential basis at an issue price of Rs 3.40 per warrant, subject to shareholders and other statutory/regulatory approvals aggregating amount of up to Rs 34,00,00,000.
Mr Vikas Garg, Promoter and Managing Director of the company shall be entitled to get these warrants converted into an equal number of equity shares of Rs 1 of the company by paying the full issue price of Rs 3.40 per warrant/equity share of Rs 1 each (including a premium of Rs 2.40 per equity shares) within 18 months from the date of warrants allotment.
The company has already repaid Rs 50 lakh of its bank debt, bringing it down to Rs 6 crore. The company plans to repay an additional Rs 10 crore by the end of this quarter and become debt-free by FY 2023-24. In FY23, the company's net sales increased by 61.2 per cent to Rs 403 crore and its net profit increased by 900 per cent to Rs 10 crore compared to FY22.
On Friday, shares of Vikas Ecotech Ltd surged 1.68 per cent to Rs 3.03 per share from its previous closing of Rs 2.98. From 0.19 per share to Rs 3.03 per share, the stock gave multibagger returns of over 1,495 per cent in 16 years. The company has a market cap of Rs 340 crore. Investors should keep an eye on micro-cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.
DSIJ's Penny Pick service provides research-backed penny stock recommendations below Rs 100. If this interests you, you can download the service details here.