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Esconet Technologies Invests ₹2.5 Crores in Zeacloud Services on Rights Basis
Team Finance Saathi
17/Dec/2024
What's Covered Under the Article:
- Esconet Technologies invests ₹2.5 crores in Zeacloud Services via a rights issue.
- The acquisition maintains Zeacloud Services as a wholly owned subsidiary.
- No regulatory approvals were needed for this investment.
On December 17, 2024, Esconet Technologies Limited (formerly Esconet Technologies Private Limited) announced an investment of ₹2,50,00,000 (Rupees Two Crores and Fifty Lakhs) in its wholly owned subsidiary, Zeacloud Services Private Limited, through a rights issue.
Details of the Investment
The investment was made by Esconet Technologies through the subscription of 1,25,000 shares with a face value of ₹10 each at a premium of ₹190 each, aggregating to the total amount of ₹2.5 crores. Despite this acquisition, Esconet Technologies continues to hold a 100% stake in Zeacloud Services, maintaining its status as a wholly owned subsidiary. This move underscores the company’s strategy to further solidify its position in the cloud services sector.
No Change in Shareholding
This acquisition will not result in any change in the shareholding percentage of Esconet Technologies in Zeacloud Services. The rights issue was purely aimed at increasing the equity capital of Zeacloud Services, while Esconet Technologies retained its entire ownership. As a result, Zeacloud Services remains fully controlled by Esconet Technologies.
Purpose and Strategic Intent
This strategic investment is part of the Use of Proceeds as outlined in the Notice Calling the EGM on 13th October 2024. The capital raised will contribute to fundraising efforts through Preferential Allotment, enhancing the operational capabilities of Zeacloud Services. The subsidiary specializes in Infrastructure-as-a-Service (IaaS) cloud services, offering solutions that emphasize simplicity, reliability, scalability, and security.
Regulatory and Compliance Details
The company confirmed that no governmental or regulatory approvals were required for the rights issue, ensuring a smooth transaction. The allotment of shares was completed on 14th December 2024, marking the successful conclusion of the rights issue process.
Financial Performance of Zeacloud Services
Zeacloud Services Private Limited was incorporated on May 11, 2022, and has shown positive financial performance. For the fiscal year ended March 31, 2024, the company reported:
- Revenue from Operations: ₹3,07,49,136
- Profit After Tax: ₹13,10,589
- Total Expenses: ₹2,91,16,652
- Profit Before Tax: ₹16,85,974
The company’s cloud services business model has contributed to its growth, with significant potential for scaling in the global IaaS market.
Conclusion
With this ₹2.5 crore investment, Esconet Technologies has further enhanced its support for Zeacloud Services, ensuring continued growth in the rapidly expanding cloud services market. The company’s clear commitment to strengthening its subsidiary will position it for future success in the cloud services industry.