Amalgamation of Tata Steel BSL and Tata Steel Ltd

Tata Steel Ltd. has announced the Composite Scheme of Amalgamation between Tata Steel BSL and Tata Steel Ltd. and has set 16th November 2021 as the record date for the purpose of determining the shareholders of Tata Steel BSL Ltd. who will be entitled to receive equity shares of Tata Steel Ltd. in the share exchange ratio as per the Scheme of Amalgamation.

As a result of this, shares of Tata Steel BSL will be suspended from trading on exchanges from 15th November 2021 onwards and will not reflect in your holdings on Kite. You can refer to this exchange circular for more information.

As per the scheme of amalgamation, the shareholders of Tata Steel BSL will receive 1 fully paid-up equity share of Tata Steel for every 15 shares held in Tata Steel BSL. Any fractional shares will be cash-settled by the company. The amalgamated shares of Tata Steel will be visible in your holdings once credited and listed on the exchanges.

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Is there any specific reason for this ?
Like, what benefit does the company get after amalgamation ?

There are many synergies in amalgamation, the most important being cost saving - there is no need for having different board of directors, HR, etc.
Bulk purchases of raw materials at one central point.
Technology/soft ware can be used across the group.

These are few of the cost savings in merger and amalgamation of companies.

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Thanks for the explanation.
Is there any other benefits other that this ?

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From the perspective of Tata Steel Balance sheet, the financials of tata steel bls will be merged and the merged financials, I am sure will be stronger, from P&L and Cashflow perspective. With regard to market share there would be a increase as these two entities will henceforth be treated as one.

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Now TSBSL was suspended, On which price the TATA STEEL LTD share will be credited?

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for every 15 shares of BSL you will get 1 share of tata steel

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At which rate the fractional shares are cash-settled? Is it the LTP of TSBSL on12th November? When such cash settlement takes place?

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Same doubt as I am holding some fractional shares

The board of directors of transferee company will consolidate all the fractional shares and allot these to trustee a trustee appointment by the. Who will then sell the shares in the market are prevailing market price and after this the funds according to one’s fractional entitlement will be credited to your bank account. You can check out the clause 13.7 here.

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I do not understand, when the shares are suspended from trading, how anybody would be able to “sell the shares in the market at prevailing market price”. Does the above reply suggest something else?

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Yes. As you know shareholders of Tata Steel BSL will receive shares of Tata Steel. So upon allotment, these will be listed on the exchanges (though the date is not known yet). So it is after this, the trustee appointed will sell the consolidated fractional shares.

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I have 15 qty with an average price of Rs 60, My investment value is 900. Before the suspension TSBSL share closed at around 85. ( Unrealised profit 15 * 25 ) 375
My total investment & profit should be Rs 900 + 375 = 1275 on TSBSL

After the amalgamation for 15 qty 1 TSL share will be credited, On which price the share will be credited?
Once the share will be credited after 15 to 20 days, On crediting day closing price will be allotted?

Let me try to explain - this is based on my understanding.

You have 15 shares of BSL. This means that you are now eligible for 1 share of Tata Steel.

On the allotment date, you will be credited with 1 shares of Tata Steel and your 15 shares of BSL will be nullifed or cancelled. In effect in your demat account you will only see 1 share of Tata Steel.

Once allotted, the price of the share will be based on the market demand and supply. Example if the share was allotted today, the market price is 1249 and you can sell the shares if you so wish and get 1249.

The price of the share will be determined by the market forces Demand vs supply.
Market forces will determine the price of the share. Company responsibility is to cancell the Bsl shares and give you one share of Tata Share and nothing else.

Yeah Thank you

I have bought tata steel bsl shares on 12th November. Will I get tata steel shares

Yes, you will be eligible to receive shares of Tata Steel. In case of fractional entitlement, you will receive cash in your bank account.

When will tata steel shares be credited post merger with tata steel bsl.
Thank you

The exact timeline is not known yet.

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At what price will it come to my holding once listed?