Shares of Lotus Chocolate Co surged to hit the upper circuit level of 5% on the BSE at ₹122.90 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 Rs 113 per 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 Ltd 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.
