This arbitrage happens because there is always a risk of merger not going through. Share price of 77 for Gujarat Borosil given the results I due to the impending merger I guess.
@Marathondreams I would like to know post demerger what the current investors in GB and BGW would be left with , Can you please specify the quantum of arbitrage ?
I don’t go in valuation details as I feel it is very subjective based on future projections and also exact assets/liabilities split would be clear once we see BS of both companies post amalgmation. But by simple logic, you can either buy 1 share of BGWL at 194 or 154 (by buying 2 shares of GBL assuming amalgamation scheme gets approved).
Has it ever happened that NCLT rejected the scheme after it was approved by shareholders and creditors etc? If so, would like to know specific case so that I can study the underlying reasons to guess possibility of it happening over here.
Just found this. Though not a case of NCLT rejecting it. I would have to google it to found specific case.
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Clear arbitrage of 25%
Its better to buy Gujarat borosil than hold borosil glass.
If one is holding 200 Gujarat Borosil : 200 x 75 = 15,000/- will result in 100 BL and 100 BR post the demerger and reclassification of business verticals.
At the same time one needs to hold 100 Borosil : 100 x 190 = 19,000/- and will result in the same 100 BL and 100 BR post the demerger .
4000/15000= 26% Discount.
Discl : Exited BG and moved GB this week.
Interesting quote from recent concall, which talks about competition & competitors. Does it hint that management doesn’t see expansion scope in opalware as they say that there are 3 players & each having 150-200 odd crores revenue doesn’t make a very big market. I recall from earlier interactions with management that they had hinted 20% growth (mainly on conversion from steel to opalware) in opalware.
UFO and Qube merger was rejected by NCLT and then got approved by NCLAT but eventually UFO decided not to go ahead with the merger. Check out the topic UFO Moviez - Views please
I have written to company secretary asking about update of Nov 21st NCLT hearing. Got back response that NCLT has give new date of hearing as 4th Dec 19. So suspense continues…
Judge has delayed the decision.
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Hearing is done. Order will be made now
Do we smell something with this third party transaction? anyone aware of reasons behind this resolution NOT getting approved
Hi
No activity post the results announcement on the thread 
Attaching them though. https://www.bseindia.com/xml-data/corpfiling/AttachLive/bd7eb2e9-686b-4aa0-942f-44dffe8ab188.pdf
Consumerware revenues grew by +13%
Also as I type this I am unaware why the stock is flying suddenly and so high.
Rgds
Deepak
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Concall notes
• 6.5% of income spent on sales and advt promotion for 9 months period.
• Larah YTD Dec 18 sales include Rs 20 Cr as one time order. Removing that, growth of 9 months Dec 19 for Larah would be around 25% above last year
• No issues of working capital issues for the distributors/dealers.
• Import duties gone up by 10% - Kitchenware, some appliances, bone china, ceramicware
• E commerce platform – same prices. Discount as trade. We mark it up on e commerce as it is convenient. Dedicated e-com product may have special discount
• Supply chain disruption due to Corona virus – Yes, we will have impact as we import from China. Have inventory to cover in short term. In long term, may have negative impact. 2/3rd sale coming from our own production. 1/3rd is imported (from China) will get impacted. Sure to get discounts from supplier or pass on increase to customers
• Borosil glass works Ltd will get renamed to Borosil Renewables Ltd. on 17th Feb.
• ESOP policy need to be amended to get ESOP holders same benefit as normal shareholders.
• Larah capacity would be full (90%) by end of the year. Repairing furnace to expand capacity by 10%. Reduce lower value product and replace it with higher value products. Will decide on further capex by Apr 20. Will also evaluate outsourcing
• Pricing is in line with La Opala. Cello may be a bit lower price than Borosil.
• 100 diff shapes for Larah.
• No of shares post amalgamation - Borosil 11.4 Cr and GBL – 11.4 Cr
• Borosil Ltd. net cash – 80 Cr. Borosil Renewables net Debt – 100 Cr (both entities)
• Larah – cost of RM is low as % of price. No inflation. Electricity is pretty stable.
• Small kitchen appliances – Toaster, mixer/grinders etc. Focus on quality, service. All outsourced. Distribution reach – long way to go
• Labquest / Borosil Technologies – slow growth, initial investment in people. Potential to give max juice.
• Jaipur warehouse – partially commissioned on 14th Jan, second part will get commission by 14th March. Will improve 1-2% of EBITDA by Q2 FY 21
• Hydra, appliances and steel serving ware – all are doing well. 40% up.
• 15,000 retail outlets, 200 distributors
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Next 2 months are going be interesting for this stock. Yesterday they received approval for their name change.
So now onwards this company would be called Borosil Renewables Ltd.
The plan is two step plan where in first step Gujarat Borosil and 2 privately held companies would be merged with Borosil Renewables (earlier borosil glass) and then consumer and scientific ware business (today’s Borosil Glass) will be demerged to form Borosil Ltd and this new demerged entity would get listed on stock exchanges in 8-10 weeks time.
Post completion of this listing, there would 2 separate listed entities having no cross holdings (currently Borosil Glass has around 25% stake in Gujarat Borosil) and with ideal no. of shares (11.4 Crores) and ideal promoter shareholding (around 70% if I am not wrong). This would bring clarity in term of business, promoter shareholding and no related party transactions. Considering the fact that consumer business is on upswing, current corporate structure and lack of transparency due to related party transactions is holding back the stock price… Once resolved, I expect the stock to get rerated
Disclosure - invested for last 2 years and hence biased.
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Record date 2: March 09, 2020 
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When we can expect shares of Borosil Limited in our demat account