For a 75% haircut, public shareholders equity is getting diluted from 23% to 8%, roughly 65%.
So, lets fit this into the calculations done by our BloombergQuint friends.They are considering an equity value of 2050 cr post fresh equity infusion. Their dilution ratio from public shareholder perspective is 1:6 , as 20 cr shares become 120 cr. Here as per the ET report, the lenders want 8% for the public shareholder. So, the dilution ratio is 8:23.
Hence new shares count should be 23 * 20 / 8 = 57.5 cr.
New share price could be 2050/57.5 = 35.65 per share, which is about the current market price range. If the business turns around, then as per their calculation,
EBITDA = 1000 cr
EV / EBITDA = 7,
EV = 7000 cr,
new share price after market re-rating post turn around = 7000/57.5 = 121.73 per share… good upside !!
Here, these calculations are based on the assumption of lenders taking a 75% haircut in exchange for a 18% equity stake, as per the news reports …