Vikas Lifecare, a small cap company engaged in the business of pharmaceuticals and healthcare products, has announced a fund raising plan of Rs 97 crore through preferential issue of convertible warrants. The company’s share price has been on a rising trend since the last week of August 2023, delivering impressive returns to its investors. In this article, we will look at the details of the fund raising plan, the performance of the stock, and the prospects of the company.
A brief background on Vikas Lifecare
Vikas Lifecare Limited (VLL) is a public limited company that was incorporated in 1995 as Vikas Multicorp Limited. The company changed its name to Vikas Lifecare Limited in 2021. The company is engaged in manufacturing and marketing of pharmaceutical formulations and healthcare products in India and abroad. The company’s product portfolio includes tablets, capsules, syrups, injections, ointments, creams, lotions, gels, eye drops, ear drops, nasal drops, etc.
The company has a strong presence in various therapeutic segments such as anti-infectives, anti-inflammatory, analgesics, antipyretics, antihistamines, antacids, anti-ulcerants, antibiotics, antifungal agents, etc. The company also has a wide distribution network across India and exports its products to various countries such as Nepal, Bhutan, Bangladesh, Sri Lanka, Myanmar, Vietnam, Cambodia, Philippines, etc
Fund Raising Plan
According to a regulatory filing by the company, the board of directors has approved the issuance and allotment of up to 24.25 crore fully convertible warrants, carrying a right exercisable by the warrant holder to subscribe to one equity share (face value of Re 1) per warrant, to the promoters and non-promoters of the company on preferential basis. The issue price has been fixed at Rs 4 per warrant, which is a premium over the current market price of Rs 3.85 (as on September 7, 2023). The total amount of the preferential issue is Rs 97 crore.
The company said that the fund raising plan is subject to shareholders’ approval and other statutory approvals, in accordance with the provisions of Chapter V of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended up-to-date and applicable provisions of Companies Act, 2013 and rules made there-under. The company also said that it has decided to supersede the earlier decision taken on August 31, 2023, for allotment of warrants only to the promoters of the company, by including certain other allottees and revising the size of the preferential issue.
The company did not disclose the names of the allottees or the purpose of the fund raising in its filing. However, it is speculated that the company may use the funds for expanding its business operations, launching new products, or reducing its debt.
Stock Performance
The announcement of the fund raising plan has boosted the investor sentiment for Vikas Lifecare. The stock jumped more than 5 per cent on September 7, 2023, to hit an intraday high of Rs 5.05 on NSE. The stock has gained around 48 per cent in less than two weeks, from Rs 3.40 on August 25, 2023. In one month, the stock has surged over 60 per cent.
The stock is currently trading close to its 52-week high of Rs 5.40, which it touched on June 9, 2023. The stock’s 52-week low is Rs 2.70, which it hit on December 21, 2022. The stock has a market capitalization of Rs 144.67 crore and an average daily trading volume of 2.55 crore shares on NSE.
Company Prospects
The company’s financial performance has been improving in recent years. The company reported a net profit of Rs 1.32 crore for the year ended March 31, 2023, as compared to a net loss of Rs 0.16 crore for the previous year. The company’s revenue from operations increased by 18 per cent to Rs 36.62 crore for the year ended March 31, 2023, as compared to Rs 31.04 crore for the previous year. The company’s earnings per share (EPS) improved from -0.02 to 0.05 for the year ended March 31, 2023 .
The company’s future prospects depend on its ability to launch new products, expand its market reach, and compete with other players in the industry. The company may also benefit from the increasing demand for healthcare products and services in India and abroad, especially in the wake of the Covid-19 pandemic. The company may also face challenges such as regulatory uncertainties, rising raw material costs, and operational risks.
Conclusion
Vikas Lifecare, a small cap stock under Rs 5, plans to raise Rs 97 crore through preferential issue of convertible warrants. The stock has been on a rising trend since the last week of August 2023, delivering impressive returns to its investors. The company is engaged in manufacturing and marketing of pharmaceutical formulations and healthcare products in India and abroad. The company’s financial performance has been improving in recent years. The company’s future prospects depend on its ability to launch new products, expand its market reach, and compete with other players in the industry.
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