ITC Ltd, Vedanta Ltd, Tata Motors Ltd, ABFRL and Siemens Ltd are a few stocks from the futures and options (F&O) segment, which will soon see corporate actions in the form of demerger of their businesses. A few these companies have received stock exchange approvals and would now be seeking shareholder, creditor and other regulatory approvals, JM Financial noted.
ITC demerger The board of ITC had on August 14 last year approved the demerger of the Hotel business with the company holding a stake of 40 per cent in the new entity and the balance shareholding of 60 per cent to be held directly by the ITC's shareholders proportionate to their shareholding.
The shareholders of ITC will receive 1 equity share of ITC Hotels for every 10 equity shares of ITC held by them. The NCLT (Kolkata bench) has approved the scheme of demerger on October 4, 2024. "As per our fundamental estimates, the demerged hotel business is expected to have a value of Rs 25 per share out of ITC current target price of Rs 530 per share," JM Financial said.
In a filing today, ITC said demerger of its Hotels business is approved. Effective Date is January 1, 2025.
Tata Motors demerger The Tata Motors board at its meeting held on March 4, 2024, had approved the demerger of the company. As a part of the Scheme, Tata Motors will demerge its commercial vehicle undertaking involving the commercial vehicle business and all its related investments into TMLCV. Further, pursuant to the scheme, the existing passenger Vehicle business in TMPV, will be merged into Tata Motors, the existing listed entity. Upon the scheme becoming effective, both TMLCV and TML will be renamed, resulting in two separate listed entities.
The Commercial Vehicle business and its related investments, under the name TML, and the passenger vehicle business, the electric vehicle (TPEM) business, JLR and their related investments, under the name TMPV. The entitlement ratio has been fixed at 1:1, i.e., the shareholders of Tata Motors Ltd will have an identical shareholding in both the listed entities.
"The scheme is subject to all the necessary shareholder, creditor and regulatory approvals which can take around 4-6 months to complete," JM Financial said.
Vedanta demerger The Vedanta board at its meeting held on September 29, 2023, had approved the demerger of diversified businesses. The proposed demerger would create independent companies housing aluminium, oil and gas, power, steel and ferrous materials, and base metals businesses under the names Vedanta Limited, Vedanta Aluminium, Vedanta Oil and Gas, Vedanta Base Metals, Vedanta Steel and Ferrous Materials and Vedanta Power.
The shareholders of Vedanta would receive one equity share of each of the 5 newly listed companies for every 1 share of Vedanta held by them. The scheme is subject to approvals from shareholders, creditors, stock exchanges, SEBI, NCLT and other regulatory and statutory approvals, as applicable. Approvals from stock exchanges BSE and NSE has been received, JM Financial noted.
ABFRL demerger The Aditya Birla Fashion and Retail (ABFRL) board at its meeting held on April 19, 2024, had approved the demerger of Madura Fashion & Lifestyle Business into a separate listed entity named ABLBL. The shareholders of ABFRL will receive 1 equity share of ABLBL for every 1 equity share of ABFRL held by them.
The scheme is subject to approvals from shareholders, creditors, stock exchanges, SEBI, NCLT and other regulatory and statutory approvals, as applicable. The stock exchanges have already issued no objection on the scheme on October 30, 2024.
"The company has received NCLT order on November 28, 2024 to convene the meeting of its equity shareholders for approving the Scheme of amalgamation among ARFRL and ABLBL and their respective shareholders," JM Financial noted.
Siemens demerger The Siemen board, at its meeting held on May 14, 2024, had approved the demerger of Siemens Energy India Limited (SEIL). The shareholders of SIEM will receive one equity share of SEIL for every one equity share of SIEM held by them. The scheme is subject to approvals from shareholders, creditors, stock exchanges, SEBI, NCLT and other regulatory and statutory approvals, as applicable.
Approvals from creditors and shareholders and the stock exchanges has been received, JM said.