Vikas EcoTech shares surge 5% as board approves second tranche of QIP

Shares of Vikas EcoTech rose sharply during the early trading session on Wednesday as the company announced its second tranche of qualified institutional placement (QIP) of Rs 50 crore. The company board also approved the floor price for the issue in its board meeting held on Tuesday.

The company board approved the size of the second and present trench of QIP, not exceeding Rs 50 crore, the company said in an exchange filing. The remaining amount of Rs 50 crore already raised by the company in June this year and resolution to raise Rs 100 crore via QIP route was approved by shareholders in its extraordinary general meeting held in February 2023.

The company board has authorized the opening of the issue on Tuesday, that is, August 29, 2023, while the floor price for the issue has been fixed at Rs 2.95 per equity shares, said the exchange filing. The company, at its discretion, may allot shares at a discount of 5 per cent to the floor price, it added.

Following the announcement, shares of Vikas EcoTech surged about 5 per cent to Rs 2.99 on Wednesday, before giving up its gains partially. The company was commanding a total market capitalization close to Rs 335 crore. The scrip had settled at Rs 2.86 in the previous trading session on Tuesday.

However, the issue price will be determined by the company in consultation with the book running lead managers appointed for the issue, the company said further in the filing.

Earlier this week, the company announced that its 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.

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.

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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