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SWELECT Energy Systems Ltd, a solar power systems company in Coimbatore, reported a 15.68 per cent increase in net profit to ₹7.30 crore for the September 2023 quarter from ₹6.31 crore (September 2022 quarter).
However, the company’s revenue from operations decreased significantly from ₹158.01 crore to ₹83.82 crore. While the reason behind the drastic reduction is not known, the raw material cost increased significantly from ₹20.79 crore in September 2022 to ₹30.43 crore in September 2023.
In another interesting development, on October 11, the board of the parent company approved the proposed sale of Amex Alloys Pvt Ltd, a wholly-owned subsidiary, to DMW CNC Solutions Private Limited (DMW). The agreed enterprise value for this transaction is ₹110 crore, contingent upon the final determination of working capital and net debt on the closing date.
However, the approval process will involve a postal ballot, and the conclusion of this ballot is scheduled for November 21. Until the shareholders provide their approval through this process, the financial results of the company will not reflect any impact or change arising from this proposed transaction, according to a statement from Swelect.
Merger between two subsidaries
SWELECT has initiated a merger process with two of its subsidiaries — KJ Solar Systems Pvt Ltd and Swelect Solar Energy Pvt Ltd.
The board of SWELECT approved the scheme of amalgamation in its meeting held on August 12, 2022, with an effective date of April 1, 2022, or as per the direction of the National Company Law Tribunal (NCLT).
The scheme is subject to the approval of NCLT and other relevant regulatory authorities. The company also conducted a creditor meeting on October 26, per the NCLT order, and submitted the minutes of the meeting to the Tribunal.
However, the financial results for the quarter and half year ended September 30, 2023, do not reflect any adjustments related to the merger, as the process is still pending, per the company’s release.
Board meeting outcomes
The company that provides manufacturing facilities for solar PV modules, solar PCUs, and servo stabilisers held its board meeting on November 8.
Swelect also announced that it would set up a “Wholly Owned Subsidiary in the name and style ESG Solar Energy Pvt Ltd, ESG Solar Power Pvt Ltd, or any other name available and approved by the Ministry of Corporate Affairs, Office of the Registrar of Companies, Central Registration Centre.”
The new subsidiary will engage in the generation of electricity through solar and wind sources. The company will invest ₹1 lakh in the equity capital of the new subsidiary, which will be the initial capital for its operations.
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