Small-cap stock below ₹100 rebounds after $4 crore claim in litigation against Elara Capital | Stock Market News
Source: Live Mint
Stock market today: Shares of Eraaya Lifespaces, which specialises in offering a wide range of kids tricycles, baby walkers, prams, and plastic toys, rebounded in intraday deals on Monday, March 17, from its day’s low but still remained in the red. The recovery in the small-cap stock followed the company’s announcement that it has initiated legal action against Elara Capital PLC, claiming $4 crore.
“We wish to inform you that the company has initiated legal action(s) against Elara Capital PLC in High Court of Justice, Kings’ Bench Division, England and Wales for release of remaining FCCBs proceeds amounting USD 40 Million,” the company said in an exchange filing today.
Litigation Details
Eraaya Lifespaces, after obtaining in principle approval from its members at the Extra-Ordinary General Meeting, held on July 29, 2024, issued an offering circular dated August 23, 2024, after which Foreign Currency Convertible Bonds (FCCBs) due 2031 totaling to $12 crore were issued.
However, Eraaya claims that proceeds from the FCCBs amounting to $4 crore have not been received by it. The company, thereafter initiated legal action in this regard against Elara Capital PLC, as it said Elara was appointed to advise and assist in the process of raising funds by issuing FCCBs.
Eraaya claimed that Elara Capital PLC is wrongfully preventing the release of the aforementioned proceeds to the company and is acting against its interests.
Share Price Trend
Eraaya Lifespaces share price tanked as much as 5% to the day’s low of ₹70.45, also its lower price band. However, the stock rebounded during the session and touched an intraday high of ₹75.80. Currently, it traded at ₹71.10, down 4% but off its intraday low level.
The small-cap stock, with a market capitalization of ₹1,355 crore, has made significant wealth for its investors, as depicted by its meteoric 9,225% rally in five years. Even in the past one year, the stock has surged 115% against a mere 2% rise in BSE barometer Sensex, thereby not only outperforming the stock market but also offering multibagger returns to its investors.
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