The issue was cleared by the company's board of directors on Tuesday. Vikas WSP will issue 18.8 lakh fresh equity shares at a price of Rs 825 per share (face value Rs 10).

The company has called for an extraordinary general meeting (EGM) on January 4, 2001 to take approval from its shareholders.

Post-issue, Vikas WSP's equity would go up by Rs 1.88 crore to Rs 11.85 crore and would add around Rs 153 crore to the premium account.

The preferential allotment of shares is being made at a premium of 45 per cent (Rs 253) to the minimum price of Rs 562.25 calculated as per the Sebi formula. The funds raised will be utilised to part-finance the company's 12,600 tonne per annum expansion in Baroda, modernisation of existing facilities and setting up a research and development centre. The balance fund requirement will be met through internal accruals.

Vikas WSP recently developed guar polymers for the baby diapers to absorb excretion and super-absorbent for females. Kimberly Clark has approved the newly developed polymers for these applications.

The advantage of the use ofguar polymers over synthetic polymers currently being used in these segemnts include guar polymers are natural and has high water absorbant capacity, easy disposal as guar polymers are bio-degradable and guar polymer is cost effective.

Vikas is world's second largest guar gum producer, and its new plant at Baroda will be operational in the last quarter of 2001. The new plant will manufacture hydroxypropyle guar (HPG), carboxymethyle guar (CMG) and hydroxypropyle carboxymethyle guar CMHPG), which find application in oil drilling and exploration, natural gas exploration and latex paints.

The Baroda plant is expected to yield an additional turnover of Rs 500 crore in 2004-05. The expansion will form part of the company's endeavour to increase the proportion of value added products in its portfolio to give a major push to its operating margins.

The aqueous-based products, planned to be manufactured in the new plant find applications in hydro fracturing of oil and natural gas wells. teh deeper and hotter gas and geothermal wells require these improved guar tools to cope up with higher temperature stability and have greater versatility than other ethers.

During the past few months, the company launched three new types of guar polymers for three different applications - landscaping, bio-fertilisers and for making smokeless coal. Our foray into bio-technology which is expected to reduce the cost of production and improve yield and quality of products.