Multibagger stock hits upper circuit for 19th straight session, up 122% in a month as Reliance Retail to buy stake

Shares of Lotus Chocolate Company Ltd continued to rally with the stock hitting upper circuit level of 5% for the nineteenth straight sessions amid Reliance Retail's process of buying stake in the company, surging from ₹96 level on December 23, 2022 to the counter hitting a fresh high of ₹242.9 per share on the BSE in Thursday's deals.

Reliance group's Reliance Consumer Products Ltd (RCPL) and Reliance Retail Ventures Ltd (RRVL) announced an open offer recently to acquire a 26% additional stake in the chocolate maker company. The firms will together acquire 33.38 lakh (33,38,673) shares of Lotus Chocolate from the open market at a fixed price of ₹115.5 per share. DAM Capital is managing the open offer which will start from February 21, 2023 and conclude on March 6, 2023. The offer will aggregate to a total consideration of ₹38.56 crore over the full acceptance.

“The Acquirer and the PAC are making this Open Offer to acquire from the Public Shareholders up to 33,38,673 (Thirty three lakh thirty eight thousand six hundred and seventy three) fully paid-up Equity Shares, constituting 26% of the Emerging Voting Capital at an offer price of INR 115.50/- in cash, aggregating to a total consideration of INR 38,56,16,731.50 (assuming full acceptance) (Offer Consideration),” Lotus Chocolate had informed in a stock exchange filing earlier this month.

Reliance Retail Ventures Ltd (RVNL) is the holding company of all the retail businesses under billionaire Mukesh Ambani-led conglomerate Reliance Industries Ltd (RIL). 

The company had earlier said that Reliance Consumer, the fast-moving consumer goods (FMCG) arm of Reliance Retail, will acquire a 51% stake from promoters at ₹113 a share and will also subscribe to some non-noncumulative redeemable preference shares and will also make an open offer to acquire 26% from public shareholders of Lotus Chocolate.

Lotus Chocolate shares have given multibagger return of more than 122% in just a month. 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 the industrial and the consumer demand.