Penny stock under Rs 5: This micro-cap company to raise up to Rs 40,00,00,000 by allotting convertible warrants to promoter!

The stock is up by 50 per cent in just 1 month.

On Thursday, shares of Vikas Lifecare gained 1.61 per cent to Rs 4.43 per share from its previous closing of Rs 4.36. The stock’s intraday high was Rs 4.81 and an intraday low of Rs 4.21 with a spurt in volume by more than 2.07 times on BSE.

Vikas Lifecare informed that the Board of Directors of the company in their meeting held today i.e., on Thursday, August 31, 2023, at the Registered Office, inter-alia:

Preferential Allotment to Promoter: To allot up to 10,00,00,000 compulsorily convertible warrants, at a premium, for cash to Mr Vikas Garg, Promoter of the Company on a preferential basis at an issue price of Rs 4 per warrant, subject to shareholders and other statutory/regulatory approvals, aggregating amount of up to Rs 40,00,00,000 (the issue).

Mr Vikas Garg, promoter of the company shall be entitled to get these warrants converted into an equal number of equity shares of Rs 1 of the company by paying the full issue price of Rs 4 per warrant (including a premium of Rs 3 per equity shares) within 18 months from the date of warrants allotment.

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 company has a market capitalization of over Rs 600 crore and very little debt. The company has only Rs 30.4 crore in outstanding debt, which is just 4.8 per cent of its current market capitalization. This means that the company is essentially debt-free.

The stock is up by 50 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.