Grasim has decided to demerge its cement business to its subsidiary, Samruddhi Cement (SCL) as part of a restructuring plan announced in October 2009. Each Grasim shareholder will get one equity share of Rs 5 in SCL for every one share held in Grasim on 28 May 2010, the record date fixed for this purpose in terms of the demerger scheme.
On completion of the demerger, SCL will be listed on the bourses in June 2010 to provide an exit opportunity to investors, as eventually SCL would be merged with UltraTech Cement. As per the swap ratio, SCL shareholders will get four shares of UltraTech (face value of Rs 10) for every seven shares (face value of Rs 5) in the company. The merger is expected to be completed in July 2010.
The merger will achieve the group's objective of consolidating its cement business into a single entity, thereby creating a platform for pursuing aggressive growth, chairman Kumar Mangalam Birla had said last year.
Following the demerger, Grasim was excluded from the barometer index BSE Sensex. Jindal Steel & Power has replaced Grasim in Sensex effective today, 26 May 2010.
The stock had hit a 52-week high of Rs 2952 on 17 March 2010 and a 52-week low of Rs 2026.20 on 29 May 2009.
The stock had underperformed the market over the past one month till 25 May 2010, falling 18.11% compared with the Sensex's 9.45% decline. It underperformed the market in past one quarter, declining 12.61% as against 1.43% fall in the Sensex.
Source: http://www.makemystocks.com/news/Grasim-slumps-on-demerger-of-cement-business-952.html
Last traded price on 18th june 2010 at NSE is 1759.50
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