Rossell India stock zooms 10% as aerospace, defense biz demerger takes effect

Rossell India’s stock surged 10 percent as the aerospace and defense demerger officially took effect.

Shares of Rossell India surged more than 10 percent on September 2 following the effective demerger of its aerospace and defence businesses.

This comes after Rossell India and Rossell Techsys Ltd filed important documents with the Registrar of Companies, officially putting their Scheme of Amalgamation into effect. The news boosted investor confidence and drove up the share price.

At 9:55 am, Rossell India shares were trading over 9 percent higher at Rs 619.45 on the National Stock Exchange (NSE)

In April, the National Company Law Tribunal (NCLT), Kolkata bench approved the scheme of arrangement between Rossell India (RIL) and Rossell Techsys (RTL).

On August 30, 2024, both companies filed a certified copy of the NCLT's approval order with the Registrar of Companies, West Bengal, marking the effective date of their Scheme of Amalgamation. As a result, the scheme became operative from August 30.

RTL is engaged in the business of cultivation, manufacture and selling of tea namely Rossell Tea Division and in the aerospace and defence business which has its engineering and manufacturing centre in Bengaluru namely Rossell Techsys Division.

As part of the scheme, Rossell Techsys Division has been separated from Rossell India and transferred to Rossell Techsys.

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Additionally, the paid-up share capital of Rossell Techsys Limited held by Rossell India will be cancelled once the equity shares are allotted to Rossell India’s shareholders. Consequently, Rossell Techsys will no longer be a wholly-owned subsidiary of Rossell India from the appointed date.

Furthermore, Rossell Techsys Inc. USA, which was set up to support the expansion of the Rossell Techsys Division, will also be transferred to Rossell Techsys Limited. As a result, Rossell Techsys Inc. USA will cease to be a wholly-owned subsidiary of Rossell India from the appointed date.

These actions are part of the compliance with the Scheme and relevant SEBI regulations, ensuring the proper execution of the demerger and restructuring process, the company informed in a regulatory filing.

The stock has gained around 33 percent so far this year, beating Nifty's returns of 16 percent during this period. In the past 12 months, the counter has risen 26 percent, compared to Nifty's rally of 30 percent.

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