Arvind Demerger: Destroyer of Wealth

 

Arvind Demerger: Destroyer of Wealth

 

Segmented Revenues

Arvind Ltd.

Arvind Ltd: Segment Revenue ( Rs. Cr)
Segment Revenue PAT
Textiles 5917 491
Advanced Material 632 45
Branded Apparels 3036 69
Engineering 0 0
Others 625 35

 

Arvind Fashions Ltd.

Arvind Fashions Ltd: Segment Revenue (Rs. Cr)
Segment Revenue
Indian 995
International 15

 

On 28th November, 2018, Arvind Ltd. demerged it’s fashion and engineering businesses and opened up two new companies. The fashion business was handled by Arvind Fashions Ltd. And the engineering was taken over by Anup Engineering Ltd.

The arrangement stated that for every 5 shares of Arvind Ltd. The shareholder would get 1 share of Arving Fashions Ltd, and for every 27 shares of Arvind Ltd. The shareholders would get 1 share of Anup Engineering Ltd.

On 27th November, 2018, the stock was trading at Rs. 311.45. However, on the day of the demerger, the share price crashed tremendously. The closing price on the day of the demerger was Rs. 109.

Anup Engineering was listed on the BSE on 1st March, 2019 and Arvind fashions was listed on 8th March, 2018

Let us assume that Mr. X bought 135 shares of Arvind Ltd on 27th March, 2018 for Rs. 310. So, his total investment would be Rs. 41850.

After the demerger, he would have 135 shares of Arvind Ltd. 27 shares of Arvind fashions Ltd. And 5 shares of Anup Engineering Ltd.

The earliest he can sell all the shares off together is on 8th March, because the last company got listed on 8th March.

On 8th March, Arvind Ltd was trading at 84.10, Arvind Fashions was trading at 621.3 and Anup engineering was trading at 549.65

So if Mr. X sold the shares of at this rate, he would get Rs. 30876.85. He would make a loss of Rs. 10973.15, that comes out to be a loss of 26.22%.

If he sold Anup enginerring for 650 in 18th March, Arvind Ltd for Rs. 95 and Arvind fashions for Rs 1050 on 26th March. He would get Rs. 44425. This is probably the only possible scenario where Mr. X would earn Rs. 2575 on his investment. This turns out to be a gain of merely 6.1% over a span of 5 months.

The above illustrations show that the demerger was not a profitable opportunity. Arvind Ltd has been falling ever since and there is a very low possibility anyone would have made money in the past few months if they had bought Arvind Ltd just before the merger.

Daily Bulletin (8th August, 2019)

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20190808-27

 

1.Scrip code : 956944
Name : Godrej Properties Limited
Subject : Announcement under Regulation 30 (LODR)-Scheme of Arrangement
In compliance with Regulation 30 of SEBI LODR Regulations, 2015 read with SEBI Circular No. CIR/CFD/CMD/4/2015 dated September 09, 2015 please note that the Board of Directors of Godrej Landmark Redevelopers Private Limited (a material wholly owned subsidiary of Godrej Properties Limited) and Godrej Projects Development Limited (a material wholly owned subsidiary of Godrej Properties Limited) at their respective meetings held today i.e. August 08, 2019 have approved the Scheme of Amalgamation under Section 230-232 of the Companies Act, 2013 of Godrej Landmark Redevelopers Private Limited with Godrej Projects Development Limited (‘Scheme’). The Scheme is subject to the requisite statutory/ regulatory approvals including the approval of National Company Law Tribunal. We enclose herewith the details required under Regulation 30 of SEBI LODR Regulations, 2015 read with SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017 in Annexure for the above mentioned Scheme.

2.Scrip code : 534690
Name : LAKSHMI VILAS BANK LTD
Subject : Announcement under Regulation 30 (LODR)-Press Release / Media Release
In view of queries received from shareholders and further to our Press Release dated 06th August 2019, we have to advise that consequent upon the completion of the pref allotment of 1.68 crore equity shares, aggregating to Rs.188.16 crores, to Indiabulls Housing Finance Limited (IHFL), the Bank’s Tier-I capital and Capital Adequacy ratio has been strengthened by 110 basis points. The Tier-1 Capital now comes to 5.56% while the total CAR now comes to 7.56%. The Bank is taking further steps to enhance capital at the earliest.We have to further add that the Bank’s efforts to recover bad loans has gained momentum and over the last four quarters, the Bank has recovered Rs.783 crores.We refer to our earlier announcement of a planned amalgamation with M/s. Indiabulls Housing Finance Limited (IHFL) and Indiabulls Commercial Credit Limited (ICCL).

3.Scrip code : 539660
Name : Sahyog Multibase Limited
Subject : Scheme Of Arrangement
For Amalgamation Of Company With Best Agrochem Private Limited (Transferor Company). Scheme of arrangement for Amalgamation of Company with Best Agrochem Private Limited (Transferor Company).

4.Scrip code : 539177
Name : Authum Investment & Infrastructure Limited
Subject : Announcement under Regulation 30 (LODR)-Open Offer – Updates: Open offer by Mrs. Alpana S. Dangi ( the acquirer) to the shareholders of Authum Investment and Infrastructure Limited (‘AIIL’) to acquire from them 6282810 Equity shares of Rs. 10 each representing 54.50% of the total equity and voting share capital of AIIL @ of Rs. 22 per fully paid up equity share. In connection to our letter dated 05th July 2019 in relation to above cited matter, in compliance with Regulation 30 of the SEBI (LODR) Regulation 2015, please note that the Company had made an application for the approval of the RBI in compliance with RBI Circular dated 9th July 2015,for the above cited change in control and management of the Company by the proposed acquirer Mrs. Alpana S.Dangi.

5.Scrip code : 524370
Name : Bodal Chemicals Ltd
Subject : Announcement under Regulation 30 (LODR)-Updates on Acquisition
Bodal Chemicals Limited has informed the Exchange about Acquisition of SEN-ER BOYA KIMYA TEKSTIL SANAYI VE TICARET LTD. STI., by entering SHARE SALE AND TRANSFER AGREEMENT.

6.Scrip code : 531642
Name : Marico Limited
Subject : Announcement under Regulation 30 (LODR)-Updates on Acquisition
Further to our letter dated April 13, 2018, intimating investment by Marico Limited (‘Marico’ or ‘the Company’) in Revolutionary Fitness Private Limited (‘Revofit’) by acquiring equity shares upto 22.5% of the post-acquisition paid-up share capital of Revofit, the Company has executed today, i.e. on August 8, 2019, Amendment agreements to the Shareholders Agreement and the Share Subscription Agreement with Revofit for further infusion in the equity share capital of Revofit such that it will eventually hold upto 37% of the post-acquisition paid-up share capital of Revofit. This investment will happen over a period of next one year subject to conditions precedent as set out in the Amendment Agreements.

7.Scrip code : 502219
Name : Borosil Glass Works Ltd.
Subject : Additional Investment In Subsidiary Company
This is to inform you that the Company has made an additional investment of Rs. 5,00,00,089/- by way of subscription to the fresh rights issue of partly paid up equity shares of Klass Pack Limited (Klasspack), a subsidiary company. With the said investment, the Company’s shareholding in Klasspack has increased from 75.73% to 79.52%. You are requested to take the same on record.

8.Scrip code : 532960
Name : Indiabulls Ventures Limited
Subject : Announcement under Regulation 30 (LODR)-Newspaper Publication
In furtherance to the stock exchange intimation dated August 6, 2019, we wish to inform you that an Advertisement for Notice to the holders of partly paid-up equity shares of the Company, to provide another opportunity for payment of second call money from August 12, 2019 to August 26, 2019 (both days inclusive), has been published in Business Standard English & Hindi (all editions) newspapers on Thursday, August 8, 2019. For reference, copies of advertisements published are enclosed.

9.Scrip code : 534309
Name : NBCC (India) Limited
Subject : Intimation Of Appointment Of Independent Director On The Board Of NBCC
With reference our earlier letter dated July 18, 2019 wherein it was informed that Ministry of Housing and Urban Affairs vide Office Order No. 0-17034/37/2019-PS, dated July 17, 2019, has approved the appointment of Dr. (Smt.) Jyoti Kiran Shukla as Non-Official Independent Director (NoD) on the Board of NBCC (India) Limited a period of three years w.e.f. the date of notification of her appointment or until further orders, whichever is earlier. Further, The Board of Directors of the Company at their Board Meeting held on August 1, 2019, have appointed Smt. Jyoti Kiran Shukla as the Additional Director on the Board of NBCC w.e.f. August 1, 2019. Information as required under Regulation 30 Para A of Schedule III of the SEBI (LODR) Regulations, 2015 is enclosed herewith. The aforesaid information is also disclosed on the website of the company www.nbccindia.com/webEnglish/announcementNotices This is for your record and information. Kindly acknowledge receipt.