NEW YORK (TheStreet) -- India Globalization Capital (IGC) stock is soaring on news it has executed a letter of intent to acquire Golden Gate, a Hong Kong-based trading company. The company proposed to acquire 51% of Golden Gate in exchange for around 1.2 million shares of its common stock to be paid out in four tranches over three years.
The company said it expects the acquisition to close in the current quarter and be accretive to earnings immediately. In its most recent financial year ended March, Golden Gate generated unaudited revenue of around $10 million. The proposed deal is subject to negotiation and execution of a definitive acquisition agreement.
By market open, shares had popped 23.7% to $1.83.
Separately, TheStreet Ratings team rates INDIA GLOBALIZATION CAPITAL as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate INDIA GLOBALIZATION CAPITAL (IGC) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."