Reliance Consumer Products (RCPL), a wholly-owned subsidiary of Reliance Retail Ventures (RRVL), will acquire 51% controlling stake in Lotus Chocolate Company (LOTUS) and make an open offer to acquire upto 26%.
RCPL, the FMCG arm and a wholly-owned subsidiary of RRVL, will acquire 65,48,935 equity shares of LOTUS representing 51% of the paid-up equity share capital of LOTUS from the current promoter and promoter group of LOTUS at a price per share of Rs 113, aggregating to Rs 74 crore.RCPL and certain promoter group entities of LOTUS will subscribe to 5,07,93,200 non-cumulative redeemable preference shares of face value of Rs 10 each at par.
Further, RCPL made an open offer to the public shareholders of LOTUS to acquire up to 33,38,673 equity shares, or 26% stake, of LOTUS at Rs 115.50 per share, in accordance with the SEBI Takeover Regulations.
Listed on the BSE, LOTUS makes chocolates, cocoa products and cocoa derivatives. It has a fully integrated manufacturing facility and is built with the best technologies and expertise from across the globe. Lotus products are supplied to chocolate makers and chocolate users across the world, starting from local bakeries to multi-national companies
Shares of LOTUS hit an upper circuit of 5% at Rs 122.95 on the BSE. The stock has risen 27.54% in five consecutive sessions. The stock's current market capitalisation stands at Rs 157.88 crore.
The capital infused by RCPL will help drive the growth and expansion of LOTUS into a comprehensive confectionery, cocoa, chocolate derivatives and related products manufacturer across industrial and consumer market spectrum backed by manufacturing, best in-class processes & people.
Isha Ambani, executive director of Reliance Retail Ventures, said, "The investment in LOTUS underlines our commitment to further boost indigenously developed daily use high quality products, to serve a broad customer spectrum at affordable prices. We look forward to working with the highly experienced management team of LOTUS as we further expand the business and drive its next growth phase."
Abhijit Pai, founder-promoter of LOTUS, said, "We have a vision to build a 'world class confectionery products business across customer segments backed by best-in-class manufacturing capabilities and talent. Our strategic partnership with Reliance, through this investment, will further enable this vision and accelerate Lotus' transformation."
RRVL is a subsidiary of Reliance Industries (RIL) and the holding company of all the retail businesses under the RIL group. RRVL, through its subsidiaries and affiliates, operates more than 16,500 own stores and partners with over 2 million merchants across Grocery, Electronics, Apparel, Pharmacy, lingerie, home and furnishing, beauty and personal care. It also operates the largest network of omni-channel business through Jio Mart, Ajio, Netmeds, Zivame and other online channels. RRVL's FMCG subsidiary, Reliance Consumer Products Ltd shall provide a wide range of products under a versatile brand portfolio.
RIL is India's largest private sector company. Its activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail, and digital services.
On a consolidated basis, RIL's net profit fell 0.2% to Rs 13,656 crore on 37.3% increase in net revenue to Rs 230055 crore in Q2 September 2022 over Q2 September 2021.
The RIL scrip was up 0.30% at Rs 2550.30 on the BSE.
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