On Thursday, the Indian equity markets experienced a significant recovery from lower levels, with the Nifty50 reclaiming the 24,600 mark and the Sensex moving above the 80,800 mark. The Nifty Bank index also saw an uptick, rising by 0.28%. However, one stock that notably underperformed was Vascon Engineers Ltd.
Shares of Vascon Engineers were seen trading with losses of more than 4% during Thursday’s session. This decline followed the company’s announcement of its decision to divest its 100% stake, comprising 12,689 equity shares, in its subsidiary GMP Technical Solutions.
Vascon Engineers has entered into a share purchase agreement with Shinryo Corporation on July 17, 2024. According to the company’s exchange filing, the transaction was conducted at a cash consideration of Rs 157 crore. Upon completion of the transaction, GMP Technical Solutions will cease to be a subsidiary of Vascon Engineers. The company expects the transaction to be finalized within the next 45 days, pending the fulfillment of the conditions stipulated in the share purchase agreement.
Founded in January 1986 by Mr. Vasudevan, Vascon Engineers Ltd. (VEL) is based in Pune and operates in the Engineering, Procurement, and Construction (EPC), as well as real estate construction and development sectors. The company commenced operations with the construction of the Patalganga factory in Maharashtra for Cipla in November 1986. Initially, up until 1998, VEL functioned as a real estate contractor, executing contracts for third parties.
VEL’s real estate business includes the construction of residential and office complexes, information technology parks, industrial units, shopping malls, multiplexes, educational institutions, and hotels. In the EPC segment, VEL has undertaken various construction contracts, primarily catering to government departments and authorities. With over three decades of presence in the EPC and real estate industries, VEL has successfully delivered more than 200 projects, covering an area of approximately 50 million square feet.
Despite the recent dip, shares of Vascon Engineers have seen an overall increase of 12.5% in 2024. Specifically, in the month of July, the shares have traded higher by 8.7%.
While the broader Indian equity markets have shown resilience and recovery, Vascon Engineers Ltd. has faced challenges following its strategic divestment decision. The coming weeks will be crucial in determining the impact of this transaction on the company’s future performance and investor confidence.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
Published on: Jul 18, 2024, 11:05 AM IST
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