Vikas EcoTech shares jump 7% as company mulls fundraising plans

Shares of Vikas EcoTech rose about 7 per cent during the trading session on Monday ahead of its meeting of the board of directors later this week to consider preferential issue to the promoters of the company. The company informed about the same through an exchange filing on Saturday.

The company board is scheduled to meet on Thursday, August 31, 2023 to issue securities, convertible instruments on preferential basis to Vikas Garg, the promoter of the company in cash, at premium, for an amount not exceeding Rs 35 crore, the company said in its exchange filing.

The company board will also consider to increase authorised capital of the Company and consequent alteration in memorandum of association (MoA) of the company, the filing added further.

Following the announcement, shares of Vikas EcoTech surged about 7 per cent to Rs 3.05 on Monday, before giving up its gains partially. The company was commanding a total market capitalization close to Rs 350 crore. The scrip had settled at Rs 2.86 in the previous trading session on Friday.

Vikas EcoTech reported a slight increase in the net profit from operations on a year-on-year (YoY) basis at Rs 1.55 crore in the June 2023 quarter. The company's net profit came in at Rs 1.46 crore in the same quarter previous year.

Vikas EcoTech is also reducing its debt in order to become debt free. The company has paid back Rs 7 crore in order to reduce bank-debt to Rs 65 crore. The company has reduced its bank-debt substantially from its peak at Rs 96.2 crore.  The company has set a goal for becoming a 100 per cent debt-free entity within the current financial year.

The New Delhi-based Vikas Ecotech is engaged in the business of specialty polymers for applications in sectors like electrical, infrastructure, packaging, and automotive, among others. The company had recently launched funds through qualified institutional placement, while also reducing debt from its books.

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