Business News/ Markets / Stock Markets/  Lotus Chocolate shares hit upper circuit as Reliance Retail to buy majority stake

Shares of Lotus Chocolate Co surged to hit the upper circuit level of 5% on the BSE at 122.9 apiece in Friday's trading session after the company informed Reliance Retail Ventures's subsidiary has agreed to buy a majority stake in Indian chocolate maker for 74 crore.

Reliance Consumer Products Limited (RCPL), the fast-moving consumer goods arm of Reliance Retail, will acquire a 51% stake from promoters at 113 rupees a share and will also subscribe to some non-noncumulative redeemable preference shares. RCPL would also make an open offer to acquire 26% from public shareholders of Lotus.

As part of the share purchase agreement (SPA), RCPL proposes to acquire 77 per cent of the paid-up share capital of Lotus Chocolate through a "secondary purchase" from promoters Prakash Peraje Pai and Ananth Peraje Pai, followed by an open offer.

"RCPL will acquire 65.48 lakh equity shares of LOTUS representing 51% of the paid-up equity share capital of LOTUS from the current promoter and promoter group.. at a price per share of 113.00 aggregating to 74 crore. RCPL and certain promoter group entities of LOTUS to subscribe to 5.07 crore non-cumulative redeemable preference shares of face value of 10 each," said a joint statement.

As per the SPA, Prakash Peraje Pai and Ananth Peraje Pai proposed to sell equity shares of the company to RCPL. Both jointly own 57% stake in Lotus Chocolate, as of the quarter ended September 2022.

Reliance Retail Ventures Ltd (RVNL) is the holding company of all the retail businesses under billionaire Mukesh Ambani-led Reliance Industries Ltd (RIL). RRVL, through its subsidiaries and affiliates, operates over 16,500 stores and partners with over 2 million merchants. It also operates a network of omnichannel businesses through Jio Mart, Ajio, Netmeds, Zivame and other online channels. In FY22, its consolidated turnover was 1.99 lakh crore.

Meanwhile, Lotus Chocolate shares have surged about 11% in a year's period. Lotus Chocolate Company Limited is a manufacturer of chocolates, cocoa products and cocoa derivatives and its products include cocoa powder, cocoa mass and cocoa butter, catering to industrial and consumer demand.

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Updated: 30 Dec 2022, 12:15 PM IST
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