Shares of Race Eco Chain Limited drew investor attention on Tuesday after the waste management company announced plans to demerge two of its business verticals, a move aimed at sharper strategic focus and long-term value creation. The stock moved up by nearly four percent during intraday trade as markets reacted positively to the proposed restructuring.
Race Eco Chain has proposed a scheme of arrangement to separate its Biomass Division and Restore Bag Division into two independent listed entities. The Biomass Division deals in briquettes made from agricultural waste, while the Restore Bag Division focuses on cloth-based products such as reusable bags and home furnishings. The company believes that operating these businesses as standalone entities will allow each segment to pursue growth opportunities more effectively.
According to company disclosures, the Biomass Division contributed around ₹1,870.70 lakh, or 4.06 percent, of total revenue in FY25, while the Restore Bag Division accounted for ₹893.82 lakh, or 1.94 percent, of overall turnover. Together, these segments formed part of the company’s ₹46,029.91 lakh revenue base for the year.
New entities to drive strategic clarity and value creation
Under the proposed restructuring, the Biomass business will be housed under a new company named GeoeCo Green Energy, while the Restore Bag business will operate as Race Gateway. Management expects the separation to improve operational efficiency, enable sharper capital allocation, and enhance transparency for investors.
Shareholders will receive equity shares in the new entities instead of cash. For every 100 shares held in Race Eco Chain, investors will receive 113 fully paid-up equity shares of GeoeCo Green Energy. In addition, for every 25 shares held, shareholders will receive 27 fully paid-up equity shares of Race Gateway, each with a face value of ₹10.
The announcement comes on the back of a robust financial performance in the second quarter of FY26. Race Eco Chain reported a 40 percent year-on-year rise in revenue to ₹148.43 crore, compared with ₹106.29 crore in the same period last year. Net profit surged sharply by 306 percent to ₹2.97 crore, driven by better operating leverage, improved margins, and disciplined cost control.
Race Eco Chain has built a diversified and stable customer base in the biofuel and recycling space. Its clients include major corporate names such as Reliance Industries, Sun Pharma, Dabur, Unilever, PepsiCo, GSK, Patanjali, CEAT, and the Aditya Birla Group. This strong client mix provides demand visibility and reinforces the company’s position in India’s growing waste-to-value and sustainable energy ecosystem.
With operations spanning biomass briquettes, recycled PET waste, cloth-based eco-products, and other recyclable materials, Race Eco Chain continues to position itself as a key player in India’s circular economy. The proposed demerger is expected to help each business focus on its core strengths while aligning with rising demand for sustainable materials and cleaner energy solutions.