Shares of this chemical stock under the ‘small-cap’ category jumped around 7 percent in Wednesday’s trading session after the company acquired a 28.96 percent stake in a special purpose vehicle (SPV) company intended to set up solar projects.
With a market capitalization of Rs 1,675.89 crores, the stocks of DCW Limited opened their trading hour on Wednesday at Rs 57.13 and currently trades at Rs 56.78, gaining approximately 7 percent as compared to the previous closing levels of Rs 53.46 apiece.
On November 6th, the company signed a Power Purchase Agreement with ‘Kaze Renewables Private Limited’, an SPV company incorporated to establish two renewable power plants in Tamil Nadu possessing an overall captive capacity of 44.5 Megawatt peak (MWp).
In the same filing, it was also mentioned that the company, as a captive user, will also execute a share subscription agreement with SPV and Cleantech Solar India OA 2 Pte. Ltd., the Parent company of Kaze Renewables Private Limited, for subscribing to the equity shares of the SPV to consume the power generated.
In connection with the above, DCW limited, via an exchange filing as of December 5th, intimated that it has entered into the abovementioned agreement by subscribing to around 24.42 lakh equity shares equating to a 28.96 percent stake of the SPV company. The total consideration, to be paid in cash, stands at Rs 19.54 crores.
During the recent financial quarters, the company’s prime business indicators such as the operating revenues and net profits have dipped with the former reducing from Rs 438.04 crores during Q1FY23-24 to Rs 414.09 crores during Q2FY23-24, and the latter, during the same time horizon, shifting down drastically from Rs 9.99 crores to Rs 2.66 crores.
Through its presentations, the company has reported an increase in the production of polyvinyl chloride (PVC) from 2,911 metric tonnes during Q1FY23-24 to 2,926 metric tonnes during Q2FY23-24. Moreover, the capacity utilization stayed at high levels with a consistent level of 108 percent.
DCW Limited is an India-based company that is engaged in the business of manufacturing integrated chemicals. The company performs its business activities through various segments including polyvinyl chloride (PVC), soda ash, caustic soda, and many others.
Written by Amit Madnani
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