@Mahesh bhai …Reviewing this merger calculation…total capital post merger should be as follows…
Pre and post amalgamation capital structure of the Transferee Company is as follows…
Issued, Subscribed & Paid-up Share Capital Equity Shares of Rs. 10/- each
51,33,674 (5.13 cr) …pre
84,13,394* (8.41 cr)…post
- Post- merger issued, subscribed and paid-up share capital is considered after cancellation of shares pursuant to the Scheme of Amalgamation.
Presently the Transferor Company (oal) holds appx. 57.66% of the Issued, Subscribed and Paid up Equity Share Capital totaling in all 29,60,280 shares of the Issued, Subscribed and Paid up Equity Share Capital of the Transferee Company (cal).
Post amalgamation in terms of the Scheme, the issued and paid up share capital of the Transferee Company will be aggregate of the existing Equity shares (net of cancellation of equity shares of the Transferee Company held by the Transferor Company) and shares to be issued to the Equity Shareholders of the Transferor Company under this Scheme.
So, we should calculate return ratios and p/e using 8.41 cr share capital i.e 84 lac shares.
Given, 32 cr combined PAT…results in EPS of 38.
Now, assuming 15 times trailing p/e to the merged market cap -> p/e = mkt cap/32 = 15 ~ 480 cr
Mkt cap/share = 480cr/.84 ~ 571 INR
So, aren’t the minority shareholders at loss with this merger (Just speaking from valuation perspective)? CMP is 715, and valuation post merger at same p/e i.e. 15 will be 571.
By the way, this news piece regarding pollution issues at its Bareilly plant surfaced in May. Not sure if this has already been cleared. Anyone?