Business Standard

This stock zoomed 20% on NCLT's nod to demerge aerospace & defense biz

Shares of Rossell India (RIL) locked in 20 per cent upper circuit at Rs 467.60 on the BSE in Friday's indtraday deals

share marketshare market

share market

SI Reporter Mumbai

Listen to This Article

Shares of Rossell India (RIL) locked in 20 per cent upper circuit at Rs 467.60 on the BSE in Friday's intraday deals.

This came after the National Company Law Tribunal (NCLT), Kolkata bench approved the scheme of arrangement between the company and Rossell Techsys limited (RTL).

The scheme involves demerger of Rossell Techsys Division of the RIL into separate company RTL. RTL is engaged in the business of cultivation, manufacture and selling of tea namely Rossell Tea Division and in aerospace and defense business which has its engineering and manufacturing center in Bengaluru namely Rossell Techsys Division.

The rationale for demerger is to create a dedicated tech vertical with focused attention on the aerospace and defense business under RTL and a dedicated tea vertical which shall continue under RIL. The 'appointed date' for the scheme is April 1, 2023.

The board of directors of the company had approved the draft scheme of arrangement on December 16, 2022.

The existing shareholders of the RTL would hold the shares of two listed entities after the scheme became effective; giving them flexibility in managing their investments in the two businesses having differential dynamics, the company said.

RIL in its financial year 2022-23 (FY23) annual report said that the company continues to focus on the various aerospace companies globally as well as the defense sector to address the increased potential for business.

A new facility has been set up at Bangalore with enhanced capabilities to meet the needs for quality and timely production by Rossell Techsys Division. The division has been catering to the requirements of certain multinational companies, with hefty order books and long term contracts.

The division continues to receive opportunities in diverse areas in electrical wiring and interconnect systems (EWIS), complex consoles, box builds, automatic test equipment (ATE’s), electrical panel assemblies (EPAs), and aftermarket product support services.

The division is expected to be a significant contributor of EWIS and EPA parts for the coming decade. The long-term outlook is positive. The Division has also submitted significantly large size bids in response to multiple RFPs, competing with global companies, with most of these bids, scheduled to reach decision points in the fiscal year 2023-2024. If won, these bids offer huge production revenue starting in 2024-2025 and through 2032, the company had said.

On Friday, a combined around 4,70,000 equity shares of the company changed hands on the BSE and NSE and there were pending buy orders for 1,90,000 shares. The stock had hit a 52-week high of Rs 549.85 on September 12, 2023.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Apr 26 2024 | 11:54 AM IST

Explore News