Small cap FMCG stock hit 5% upper circuit after Reliance completes majority stake of 51%
1 min read 26 May 2023, 08:10 PM ISTLotus Chocolate Company is a small cap FMCG company that recorded a market cap of ₹195.70 Cr during Friday's closing session.
PremiumLotus Chocolate Company is a small cap FMCG company that recorded a market cap of ₹195.70 Cr during Friday's closing session. The stock opened today on the BSE with an upside gap of locked in upper circuit limit of ₹152.40 with a traded volume of 6,676 shares.
This bullish trend was seen in the stock after Reliance Consumer Products (RCPL), the fast-moving consumer products subsidiary of Reliance Retail Ventures (RRVL), finalised the acquisition of a 51% majority stake in the Lotus Chocolate Company for a total price of ₹74 crore. Reliance Retail Ventures said in a release on Thursday that RCPL has also signed up for Lotus' non-cumulative redeemable preference shares for a total of ₹25 crore.
Reliance Consumer Products (RCPL) has finalised its acquisition of 65,48,935 equity shares, which represents a 51 percent controlling stake in Lotus Chocolate Company, according to an exchange filing. In December of last year, Reliance Retail announced that RCPL would file an open bid to acquire up to a 26% stake in Lotus Chocolate Company Limited and acquire a majority 51 percent stake in that company.
It had said that RCPL will buy 65,48,935 equity shares of LOTUS, or 51% of the company's paid-up equity share capital, from the current promoter and promoter group of Lotus for a price of Rs. 113.00 per share, or a total of Rs. 74 crore. Additionally, it stated that RCPL and some LOTUS promoter group firms will pay equal footing for 5,07,93,200 non-cumulative redeemable preference shares with a face value of ₹10.
Lotus is one of the handfuls of makers of chocolates, cocoa products, and derivatives of cocoa in India listed on the BSE stock exchange.
Commenting on the technical outlook of the stock, A R Ramachandran, Co-founder & Trainer-Tips2trades said "Even though FY23 has been a bad year for Lotus Chocolate Company, the news of Reliance Consumer acquiring 51% majority stake has expectedly led to a sharp rally today with 139 acting as a strong support on the Daily charts. A daily close above resistance of 153 could lead to a target of 178 in the near term."
