Ganesha Ecosphere and Race Eco Chain Form Joint Venture

Ganesha Ecosphere Limited (GESL) has signed a joint venture agreement with Race Eco Chain Limited (RACE) to set up washing plants to produce PET flakes. The joint venture company, named Ganesha Recycling Chain Private Limited, is expected to strengthen the supply chain for PET waste.

Ownership and Investment Details

Under the agreement, RACE will hold a 51% stake, while Ganesha will own 49% of the joint venture. Both companies will have equal representation on the Board of Directors.

For this venture, Ganesha has subscribed to 29,40,000 equity shares at ₹10 each, amounting to ₹29.4 crore. RACE has subscribed to 30,60,000 equity shares at ₹10 each, totalling ₹30.6 crores.

Purpose of the Joint Venture

The joint venture is part of Ganesha’s strategy to improve its raw material supply chain for PET waste. PET flakes are widely used in manufacturing recycled polyester fibre, which has applications in textiles and packaging.

Both companies have the right to appoint an equal number of directors to the board. Other terms include:

• Right to first share subscription in case of issuance
• Restrictions on changes to the capital structure

Financials of the Companies

As per the FY24 financial statements, Ganesha Ecosphere recorded a revenue of ₹9,753.40 crore and a net worth of ₹10,891.52 crore, while Race Eco Chain reported a revenue of ₹3,384.98 crore with a net worth of ₹222.87 crore.

As of February 1, 11:54 AM, Ganesha Ecosphere Ltd is trading at ₹1,690.00, up 3.30% (₹53.95) today, but has declined 14.05% over the past month, while gaining 9.53% in the last five days. 

Meanwhile, Race Eco Chain Ltd is at ₹339.05 as of 11:56 AM, rising 2.60% (₹8.60) today, with a 10.34% drop over the past month but a 3.38% gain in the last five days.

Industry Context

India generates around 3.5 million tonnes of PET waste annually. The joint venture is expected to increase waste processing capacity and improve the supply of raw materials for recycled products.

The agreement is not a related party transaction, and neither company is part of the other’s promoter group. There are no conflicts of interest arising from the agreement.

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