Vikas Lifecare shares jump over 18% to hit new highs after another acquisition in Dubai

Shares of Vikas Lifecare Ltd surged during the trading session on Tuesday to hit a new 52-week high after the company announced to acquire a substantial stake in a Dubai based entity. The company informed about the same through an exchange filing on Monday.

Vikas Lifecare has announced acquisition of a major stake in the renowned 'SKY2.0 Club' in Dubai (UAE) for $79 million, said the in the exchange filing with the bourses. The acquisition is a share swap deal signed between Vikas Lifecare and the holding company Blue Sky Event Hall FZ-LLC, Dubai, for acquisition of 60 per cent stakes in the SKY 2.0 Club business, it said.

The acquisition will also mark its venture into future business deals in the relevant business segment at an enterprise valuation of about $130 million. The acquisition process shall be completed within this fiscal year. This investment of more than Rs 655 crore is the largest by Vikas LifeCare till date.

Following the announcement, shares of Vikas Lifecare surged 18.20 per cent on Tuesday to Rs 7.92, hitting its new 52-week high, with a total market capitalization of more than Rs 1,200 crore. The scrip had settled at Rs 6.70 in the previous trading session on Saturday.

Shares of Vikas Lifecare have delivered a return of 200 per cent from its 52-week low at Rs 2.66 hit in May 2023. The stock has surged about 15 per cent in the last one month, while it has gained about 60 per cent in the last one month period. The stock is up 150 per cent in the last six months.

The 'SKY 2.0' is the largest nightclub in the Middle East and Asia, an open-air venue. SKY 2.0 recorded about $22.10 Millions of gross revenues accrued from the business during 2023, with 38.80 per cent net profit margin and about 36 per cent growth in revenues on a year-on-year (YoY) basis.

Vikas Lifecare has recently entered into the entertainment and hospitality business. Last week, the company acquired 50 per cent stakes in Portfolio Managing Events LLC, Dubai, UAE (PME Entertainment) valued at an enterprise value of Rs 201 crore.

Vikas Lifecare is engaged in manufacturing and trading of polymer and rubber compounds and specialty additives for plastics, synthetic and natural rubber. The company has most recently diversified its business interests beyond raw materials and forayed into the B2C segment.

Also read: Budget 2024: Big bang announcements unlikely. What Nomura, HSBC, BNP Paribas, Jefferies, others say