Vikas Lifecare shares jump 6% as co board revises preferential issue size

Shares of Vikas Lifecare rose sharply during Thursday's trading session after the company revised the size of preferential issue to the promoters and other investors of the company. The company informed about the same, through an exchange filing on Wednesday.

The company board has approved the allotment of 24.25 crore fully convertible warrants, carrying a right exercisable by the Warrant holder to subscribe to one equity share per warrant to the promoters and other investors belonging to 'non‐promoter and/or public category, the company said in the exchange filing.

The issue price for this preferential allotment has been fixed at Rs 4 per warrant for a cash consideration amounting to Rs 97 crore, subject to shareholders' approval and other statutory approvals, it added in the filing. The notice seeking the members' approval for the same has been accordingly revised. The company will call its annual general meeting (AGM) on September 30, 2023.

Following the update, shares of Vikas Lifecare surged 6 per cent to Rs 5.03 on Thursday, before giving up its gains partially, commanding a total market capitalization close to Rs 725 crore. The scrip had settled at Rs 4.76 in the previous trading session on Wednesday. The stock has gained about 62 per cent in the last one month.

Earlier, the company board had approved the issue of 10 crore warrants to promoters only, amounting to Rs 40 crore, but now the issue size has been increased as 14.25 crore additional warrants, worth Rs 57 crore shall be issued to host of other investors as well. However, the issue price remains unchanged at Rs 4 apiece.

Total Income of the company rose 26 per cent QoQ and 20 per cent YoY to Rs 106.31 crore in the first quarter of the ongoing fiscal. Its total income came in at Rs 84.15 crore in the March 2023 quarter and Rs 88.87 crore in the June 2022 quarter. Operating profit came in around Rs 4 crore with an operating profit margin around 4 per cent in Q1FY24.

Vikas Lifecare is engaged in various business segments including polymer & rubber commodity, compounds and master-batches. It also manufactures up-cycled compounds from industrial and post-consumer waste and scrap materials. It also provides a wide variety of base polymers and commodity raw material to ONGC.  

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