Penny stock under ₹5 hits 5% upper circuit after this business diversification move | Stock Market News
Shares of Gujarat Cotex ended 5% higher at ₹3.25 apiece in Monday's trade, 17 August, after the company announced plans to expand and diversify its business activities through the establishment of two new business divisions, namely "Prabhat Oils" and "Prabhat Infratech".
In its regulatory filing on Monday, Gujarat Cotex said it is proposing to establish Prabhat Oils as a business division focused on opportunities in the edible oils and refined oils sector.
The proposed activities may include, inter alia, trading, processing, refining, job work and other allied activities relating to edible and refined oils.
The company said the proposed division is intended to leverage the recognition and goodwill associated with the Prabhat brand and the relevant business experience of the promoter group, with the objective of building a scalable presence in the edible oils segment.
Gujarat Cotex also proposes to establish Prabhat Infratech to explore opportunities in the real estate and infrastructure sector.
According to the company, the proposed division may undertake and/or participate in residential, commercial and apartment development projects, particularly in and around Surat, while also evaluating opportunities in emerging growth destinations including Dholera Smart City.
The company said it proposes to evaluate opportunities based on their commercial viability, strategic suitability and long-term potential for value creation. The proposed expansion represents a significant step in the company's ongoing efforts to diversify its business activities and establish new growth avenues across promising sectors.
The proposed establishment of these two divisions is expected to enable the company to diversify its business operations into new sectors, explore additional revenue and growth opportunities, leverage the Prabhat brand and promoter experience, build potential growth platforms in edible oils, real estate and infrastructure, and strengthen the company's business portfolio with a view to long-term sustainable growth and stakeholder value creation.
On the next steps, the company said the proposals relating to the establishment of Prabhat Oils and Prabhat Infratech shall be placed before the board of directors at its forthcoming meeting for consideration and approval.
Subject to the approval of the board and completion of all applicable statutory, regulatory and other necessary requirements, Gujarat Cotex proposes to commence the activities of these business divisions in a phased manner.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
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