An Article on the Orient Paper Demeger Transaction and change in Corporate Restructuring.
@Chanrdrab - If anyone buys Orient Paper on 10th Jan and sell on 15th Jan, will he still get shares of Orient Electric or he needs to hold Orient Paper till Orient Electric is listed and shares alloted to him?
10th-Yes… you will be eligible if sold on 15th Jan…
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Thanks Aditya. It obviously will be short term capital gains for me. Suppose I bought it for Rs. 172 on 10th Jan and sold it at Cmp of Rs.49 on 15th Jan, what will be the book value of Orient Paper to help me calculate STCG on it? And how book value of Orient Electric will be ascertained? Will listed price become the book value of Orient Electric or there is different mechanism to calculate it?
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Yes …you get Orient Electric, as Aditya mentioned 
. Regarding ST Capital Gain : My guess is if you sell Orient Paper at 49 , you can show Capital Loss . For Orient Electric your acquisition cost will be considered as zero and if you sell Orient Electric within 1 year from the date you bought Orient Paper, you may have to pay ST Gain on the entire amount. I am not 100 % sure on this. Senior VP forum members or CAs in the group kindly advise. Many Thanks.
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co will anounce a break-up ratio - u have to apportion your cost to the two stocks in that ratio. Holding period will be from the date of purchase of original share.
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Crompton Greaves was the similar case that I can recollect. The company had allocated zero cost to the Crompton Consumer Electronics. http://www.bseindia.com/xml-data/corpfiling/AttachHis/A8F93A92_E98E_4C79_A501_DA568F1B0698_162210.pdf
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Thank you so much Chetan. Does anyone know what is the breakup ratio Co announced in case of Orient Paper / Electric.
Breakup ratio is 1:1
Orient Electric credited into Dmat account on friday…
very quick… in few days of demerger
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Breakup ratio is not same as share entitlement ratio, They will send a separate document for cost calculation. Wait for a week or 2 and it will be released, if not already.
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Hello,
Received letter from Orient Industries on Breakup ratio. It is Orient Paper 60.77 and Orient electric 39.23
You received this letter thru post/courier or email?
Letter is received thru post only.
Does anyone know when Orient Electric will be listed in the exchanges ??
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What is the break-up ratio on Orient Paper and Orient Electric? Like if I have bought orient paper @ Rs100 before the demerger, what would be my investment cost of orient paper and orient electric?
Orient Paper & Ind Ltd 60.77%
Orient Electric Ltd 39.23 %
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Orient Paper expects FY19 margins to be better than last year
Very good interview with Management Link
ML Pachisia, managing director of Orient Paper, spoke to CNBC-TV18 about the company’s business plans and growth prospects.
“The paper prices are reasonably firm because the pulp prices have gone up substantially, internationally and international paper prices have also gone up. The depreciation in rupee is also helping. Domestic prices are also inching up. There have been some increases by different companies in the month of June, July and then probably September, I am not aware of what increases have taken place but the chances are that the demand is firm,” Pachisia said.
“Margins are reasonably satisfactory, they are likely to be on similar lines as Q1 results maybe slightly better. So the pulp prices have gone up in the last fifteen months by more than 70 percent. So internationally there has been a huge increase in the cost of pulp and paper prices also therefore have moved up although not in that same proportion,” he added.
“Our margin for Q1 is not representative because we had 21 days of plant shutdown in Q1 for maintenance purposes. Therefore that is not a representative number,” said Pachisia.
“Currently the market is fairly bullish and we are soon going to approach the main season for notebooks and exercise books etc and then the festival season. We are going to increase our capacity for pulp so that we can reduce our dependence on imported pulp,” he further mentioned.
“We are looking at more than 20 percent margins. Let us see what we are able to achieve,” Pachisia said.
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The factors which are going in favour of Orient paper and Other Paper companies are:
a. Rupee Depreciation is making import from ASEAN countries costlier
b. International Paper prices have gone up, this is making dumping of paper to India costlier
c. Though international paper consumption is showing low growth because of digitization, India paper demand is expected to grow by 4-5% annually.
Comments Invited.
Disc: Not Invested, but tracking
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