Shares of this small-cap Auto Ancillary Stock jumped 8 percent after entering into a Power Purchase Agreement to acquire a stake of 26 percent each in a couple of special purpose vehicles (SPVs). In the last month, the company’s stock has moved close to 31 percent.
With a market capitalization of Rs 6,773.02 crores, the stocks of Varroc Engineering Limited closed at Rs 443.30 in Thursday’s trading session. The company’s scrip witnessed an intra-day high price, also marked as the new 52-week high level, of Rs 451.30 indicating a gain of around 8 percent as compared to the previous closing levels of Rs 418 apiece.
Such stock price movements were witnessed after Varroc Engineering, in a filing with the BSE dated 6th September 2023, intimated that the company, along with its subsidiaries, entered into a ‘Power Purchase Agreement’ to acquire a 26 percent stake in a set of special purpose vehicles named “AMP Energy C&I Twenty Private Limited”, “AMP Energy C&I Twenty One Private Limited”, and “AMP Energy C&I Twenty Two Private Limited”.
The acquisition is decided for the purpose of establishing Renewable Power Plants in Maharashtra having a combined capacity of 33.10 MWp / 22.01 MWac under the ‘Captive Power’ scheme.
The estimated period of time for the purpose of completion of the said acquisition is decided to be 31st March 2024. Moreover, the consideration for the same is mentioned to be a ‘cash’ one.
The company has successfully been able to portray growth in the latest financial year with the operating revenues increasing from Rs 5,844 crores during FY21-22 to Rs 6,863 crores during FY22-23. Moreover, the after-tax profits transitioned from a loss of Rs 77 crores during FY21-22 to a profit of Rs 33 crores during FY22-23.
According to the shareholding data available for the June 2023 quarter, the company’s Promoters hold a 75 percent stake, and the Foreign Institutional Investors (FIIs) hold a 5.07 percent stake in the company.
Varroc Engineering Limited is a company based in India that is associated with the process of manufacturing as well as supplying components for automobiles, consumer durables, etc. Geographically, the company derives a majority of its revenue from the European region, and, in addition, has a presence in North America, Asia Pacific, etc.
Written by Amit Madnani
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