The Indian chemical industry is poised for growth and has the potential to become a $1 trillion market by 2040 with a CAGR of 8-10 per cent over 2021-40, according to a report by IDBI Capital. Amid increasing chemistry expertise, scale of products, and financial discipline with the government pushing for economic diversification, small-cap specialty chemical stock Vikas Ecotech has informed exchanges about its plan to raise funds to meet corporate needs.
The proceeds will be raised via preferential issue, according to a BSE filing by the New Delhi-headquartered firm. The filing said its board will take up the proposal to approve the issuance of securities, and convertible instruments on the preferential basis not exceeding Rs 350 million to promoter Vikas Garg.
Preferential issue refers to the procedure of bulk allotment of fresh equity shares to individuals or any entity. As per the Companies Act, 2013, it is a method for corporations to raise funds from the market.
Meanwhile, Finance Minister Nirmala Sitharaman, while speaking at the ‘Global Chemicals and Petrochemicals Manufacturing Hubs in India’ summit recently, said the government is considering bringing the Production Linked Incentive (PLI) scheme for the chemicals and petrochemicals sector to India to make it a manufacturing hub for such products.
She said that global manufacturers in the chemical industry are looking at diversifying their products and production capabilities, and India stands out as an alternative destination for manufacturing.
The IDBI Capital report added that even though the current fiscal year will be a year of consolidation with headwinds present in the China market, the chemical space players in the domestic market are investing in building solid research and development infrastructure for upcoming growth and are prudently allocating capital.
It noted that companies that are resilient and possess moats to weather headwinds will be the biggest beneficiaries of the growth.
Notably, the in-house research & development (R&D) unit of Vikas Ecotech is recognised by the Department of Scientific and Industrial Research, Ministry of Science & Technology. Earlier this month, it announced plans to set up a world-class research laboratory that meets international standards and achieves NABL accreditation. Last month, a PTI report said that Vikas Ecotech is aiming to become debt-free by the end of the financial year 2023-2024.
Latest Business News