Penny stock under Rs 5 jumps 16 per cent after acquiring 98 per cent stake in MSR Apparels Pvt Ltd worth Rs 125 million!

Penny stock under Rs 5 jumps 16 per cent after acquiring 98 per cent stake in MSR Apparels Pvt Ltd worth Rs 125 million!

Kiran Shroff

At the closing bell, shares of the company were trading at Rs 3.46 per share, up 11.25 per cent with a spurt in volume by more than 3.50 times on BSE.

On Monday, shares of Vikas Lifecare jumped 16.72 per cent to Rs 3.63 per share from its previous closing of Rs 3.11. At the closing bell, shares of the company were trading at Rs 3.46 per share, up 11.25 per cent with a spurt in volume by more than 3.50 times on BSE.

The acquisition and stellar Quarterly Results were the main drivers of the sudden stock price increase. Here are the details:

Acquisition News: Vikas Lifecare Limited announced that moving further ahead with the objective of broad-basing the product portfolio, and diversifying into futuristic and unique product lines, new edge businesses, complimenting and supplementing the existing business lines of the company, we have acquired 98 per cent equity of MSR Apparels Private Limited (a company engaged in manufacturing of all types of textile garments and clothing accessories) from its existing promoters and shareholders in an all-cash deal for a total consideration of Rs 125 million thus it became a subsidiary company.

Through this acquisition, Vikas Lifecare, which has recently diversified its business interests beyond raw materials, a B2B business, and forayed into the B2C segment with a host of consumer products including FMCG, agro, and infrastructure products; is entering into another essential aspect of the life, textile, garments and clothing.

Quarterly Results: The Net sales stood at Rs 98.89 crore, up 6.48 per cent; Profit before tax stood at Rs 12.92 crore, up 420.50 per cent and Profit After Tax of Rs 11.70 crore, up 340 per cent in Q1FY24 compared to Q1FY23.  

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Earlier, Genesis Gas Solutions Ltd, a subsidiary of Vikas Lifecare Ltd entered into a joint venture agreement with Indraprastha Gas Limited (IGL) to set up an integrated smart meter manufacturing plant with a capital expenditure of Rs 1,100 million (Rs 110 crore).

The company has a market cap of Rs 500 crore. Additionally, the company has very little debt, with only Rs 30.4 crore outstanding. This is just 6.80 per cent of its current market capitalization, which means that the company is essentially debt-free. Investors should keep an eye on this micro-cap stock.

Disclaimer: The article is for informational purposes only and not investment advice. 

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