Penny stock under Rs 5: This micro-cap company acquired 100 per cent equity of an existing Plasticizer Manufacturing Business and likely to increase revenue by 2,500 million!

The stock gave multibagger returns of over 100 per cent in 2 years. Investors should keep an eye on this micro-cap stock.

Vikas Ecotech Limited announced that that the company has acquired 100 per cent equity of an existing Plasticizer Manufacturing Business valued at enterprise value of ~Rs 270 Million in an all-cash deal. The acquisition is targeted to be completed by December 2023.

The company in the pursuit of broad-basing its business interests via adding newer Products, Markets and investments in vivid and vibrant business segments has finalised this acquisition and signed a definitive Share Purchase Agreement to buy 100% Equity from its existing shareholders. The products offering of the acquired Plasticizer Manufacturing Business perfectly complement and enhance company’s existing product basket.

Vikas Organics Pvt Ltd (VOPL) is a well-established company that's been around for over 30 years. They're known for making plasticizers, which are used in various industries. They've been a popular brand in India for about 25 years. In 1992, Dr Lalit Batra started VOPL with a modern plant in Daman, near Mumbai. This plant can produce 12,000 metric tons of plasticizers each year. Some of the plasticizers they make include Di-Octyl Phthalate, Di-Butyl Phthalate, and Di-Octyl Adipate.

VOPL is big on technology and keeps up with changes in the industry and environmental laws. They invest in research and development to create new materials. They plan to add new products like Diisononyl Phthalate, Butyl Acetate, and Dioctyl Terephthalate in the next 6-12 months.

Their customers use their products in various ways, like making perfumes, cosmetics, pharmaceuticals, and even PVC pipes and cables. VOPL is ISO 9001:2008 certified, and they have customers in India and overseas.

In India, they have a strong marketing team with agents and distributors all over the country. They also have strategic locations in different cities. Their factory in Daman is well-placed for both local and international markets. They export about 17% of what they produce to countries like the USA and Saudi Arabia.

Now, Vikas Ecotech Limited is planning to acquire VOPL. This acquisition is expected to increase their annual revenue by Rs 1,000 million and strengthen their financial position. They will also expand the range of plasticizer products and potentially add up to Rs 2,500 million to their annual revenue with the newly acquired factory.

Earlier, The Board of Directors of the company considered and granted in-principle approval for evaluating the consolidation proposal of the company with Vrindaa Advanced Materials Limited, a company incorporated under the Companies Act, 1956 and appointed Price Waterhouse & Co LLP (an individual member firm of the network of member firms of PricewaterhouseCoopers.

Today, shares of VEL gained 0.30 per cent to Rs 3.34 per share with an intraday high of Rs 3.38 and an intraday low of Rs 3.29. The stock gave multibagger returns of over 100 per cent in 2 years. Investors should keep an eye on this micro-cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.