Penny stock under Rs 5 jumps 18 per cent as it is likely to raise funds up to Rs 40,00,00,000 after acquiring 98 per cent equity of MSR Apparels Private Limited!

The stock is up by 40 per cent in just 1 month.

On Monday, one of the Top Gainers on BSE, shares of Vikas Lifecare Ltd jumped 18.82 per cent to Rs 4.04 per share from its previous closing of Rs 3.40. At the closing bell, shares of the company were trading at Rs 3.99 per share, up 17.35 per cent with a spurt in volume by more than 1.01 times on BSE.

The sudden rise in the stock price was due to the company announcing that the meeting of the Board of Directors of the company shall be convened on Thursday, August 31, 2023, inter-alia, to transact the following businesses:

1) To issue securities, and convertible instruments on a preferential basis to Mr Vikas Garg, promoter of the company, who signified his intent in writing to subscribe additional equity/convertible instrument/warrants, or any other combination thereof, in cash, at a premium, for an amount not exceeding Rs 40,00,00,000

2) To consider and approve any other item(s) with the permission of the chair

Previously, the company acquired 98 per cent equity in MSR Apparels Private Limited, a company engaged in manufacturing all types of textile garments and clothing accessories, for Rs 125 crore in an all-cash deal. This acquisition will help the company to broad-base its product portfolio and diversify into new businesses, complimenting and supplementing its existing business lines.

Vikas Lifecare Ltd, a leading trader and manufacturer of polymer, rubber compounds and additives for plastics, synthetic & natural rubber, infra, agro products, FMCG products, etc. According to the Quarterly Results, the company's net sales increased by 6.48 per cent to Rs 98.89 crore in Q1FY24, compared to Q1FY23. Profit before tax (PBT) increased by a whopping 420.50 per cent to Rs 12.92 crore, while profit after tax (PAT) increased by 340 per cent to Rs 11.70 crore.

This micro-cap stock is worth watching, as it has a market capitalization of over Rs 500 crore and very little debt. The company has only Rs 30.4 crore in outstanding debt, which is just 5.3 per cent of its current market capitalization. This means that the company is essentially debt-free.

The stock is up by 40 per cent in just 1 month. Investors should keep an eye on this micro-cap stock.

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