Shares of Lumax Auto Technologies jumped 7% in Tuesday’s trade after the company announced the acquisition of OK Play Group’s roto-molded plastic business at an estimated enterprise value of around Rs 150 crores.

Lumax Auto Technologies is a smallcap company with a market capitalization of Rs 730 crores. Following the announcement, the scrip rose 7.45% to hit a high of Rs 109.55 on BSE.

In a regulatory filing, the company said, “The deal will provide Lumax Auto Technologies access to the latest roto-molding technologies.”

Read Also: Sensex Tanks 400Pts On Coronavirus Concerns; Metal Top Drag

The deal will empower the Lumax Auto company to exploit fast-emerging growth opportunities in the automotive roto-molded plastic fuel tanks market for commercial vehicles, tractors, and off-road vehicles in view of changing the environment, said by the company.

The initial purchase consideration will be based on an enterprise value that will be Ebitda multiple of 5.67 times, to be applied on 3 years average Ebitda of Fy18-20 of the Auto Component Business of OK Play, it said.

As part of the deal, Lumax Auto will provide a loan of Rs 20 crores to OK Play India (OKPI) on closing at simple interest of 12% per annum, to be repaid by OKPI along with interest, by July 25, 2023.