BCL Industries shares rebound 4% from day's low; here's why

Shares of BCL Industries rebound during the trading session on Wednesday. The company board has decided to reduce focus on the edible oil business. Also, its select public category investors have converted warrants into equity shares of the company.

The edible oil business segment has seen significant volatility and depressed margins due to reduced cultivation of local oil seeds and is hence experiencing sustainability pressure. Consequently, the board has decided to terminate the lease for the Jalalabad unit and also shut down the Bathinda edible oil unit in the near future, said the company in an exchange filing on Tuesday.

A portion of Bathinda edible oil business will be shifted to the Bathinda distillery complex, where BCL has substantial land, power and other infrastructure. A majority of the available power and utility available at the distillery site will be utilised in a 150 kilo litre per day (KLPD) ethanol expansion for which the company has already applied for environmental clearance, it added.

In another exchange filing, the company said that its shareholders have converted 1.5 lakh warrants into equity shares of the company after payment of the remaining 75 per cent of the amount. However, about 42.59 lakh warrants are yet to be converted into equity shares by promoters, promoter group shareholders and public category investors.

These warrants were issued at a price of Rs 360 apiece and the company has received the remaining 75 per cent balance or Rs 270 per share, aggregating to Rs 4.05 crore, for conversion of warrants into equity shares. The warrants, which were issued March 4, 2023 were to be converted into equity shares within 18 months from the day of issue.

Following the announcement, shares of BCL Industries rebounded about 4 per cent to Rs 551.65 on Wednesday from day's low at Rs 529 apiece on Wednesday. The company was commanding a total market capitalization of more than Rs 1,325 crore. The scrip had settled at Rs 541.45 in the previous session.

As of now, BCL Industries is a fast-moving consumer goods (FMCG) major, engaged in manufacturing of vanaspati ghee, refined edible oils and other products. The smallcap company board had approved the subdivision of its equity shares in a 1:10 ratio but the record date for the same is yet to be announced.

BCL Industries will have a one-to-one virtual meeting with Darshil Pandya from Finterest Capital on Friday, September 29, 2023, to discuss the ordinary course of business and about the industry, the company informed the bourses.

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