Shareholders gave the approval at the extraordinary general meeting held on Thursday at the company's registered office in Haryana.

The placement of fresh equity shares at Rs 825 per share is at a 27 per cent premium to the current market price of Rs 650 and a 42 per cent premium to the price fixed as per the Sebi formula of Rs 562.25 per share.

Post-allotment, Vikas WSP's equity will rise marginally from Rs 9.97 crore to Rs 11.85 crore.

Vikas WSP plans to raise close to Rs 155 crore from the preferential allotment meant to part finance its Rs 220 crore expansion-cum-modernisation plan. The balance amount is proposed to be met through internal accruals.

Part of the funds will be used to set up a research and development facility with an investment of Rs 25 crore.

The company is setting up a greenfield 12,600 tpa facility to 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.

Products planned to be manufactured are high value added guar derivatives to be used in various industrial applications. The Vadodara plant is expected to yield an additional turnover of Rs 500 crore in 2004-05. Vikas is the world's second largest producer of guar polymer next only to UK-based Rhodia.