Tata Coffee Limited (TCL) and Tata Consumer Products Limited (TCPL) announced the merger of their businesses which became effective from January 1, 2024.
As part of the scheme of arrangement, the plantation business of Tata Coffee Limited will be demerged into a separate entity known as TCPL Beverages and Foods Limited (TBFL), while the remaining business of Tata Coffee Limited will be merged into Tata Consumer Products Limited.
The company has set January 15, 2024, as the record date to determine the shareholders of Tata Coffee to whom shares of Tata Consumer Products will be allotted. You can check the announcement here.
As a result of this, the shares of Tata Coffee Limited will be suspended from trading on the stock exchanges from January 15, 2023, onwards and the shares will not reflect in your holdings on Kite.
As per the scheme of arrangement, shareholders of Tata Coffee Limited will get:
-
1 share of Tata Consumer Products for every 22 shares held for demerger of TCPL Beverages and Foods
-
14 shares of Tata Consumer Products for every 55 shares held for the merger of Tata Coffee with Tata Consumer Products
When will I receive shares of Tata Consumer Products?
Generally, the credit of shares can take between 30 - 45 days from the record date. You’ll receive an email from CDSL once the shares are credited to the demat account.
When will the allotted shares start trading on the exchanges?
After the credit of shares, the company has to get approval from the exchanges to list the shares. Post the approvals are received the shares will start trading on the exchanges.
What if I hold less than 22 and 55 shares of Tata Coffee?
Even if you are holding less than 22 and 55 shares of the company, you are entitled to receive shares of Tata Consumer Products. For example, if you hold 10 shares of Tata Coffee, you will get:
-
For the demerger of TCPL Beverages and Foods (The ratio is 1 share for 22 shares held), you are entitled to get 0.4 shares (1/22 = 0.04 * 10). Since this results in fractional entitlement. In this scenario, payment for fractional shares will be credited to your primary bank account.
-
For the merger of Tata Coffee with Tata Consumer Products (The ratio is 14 shares for 55 shares held), you will get 2.5 shares (14/55 = 0.25 * 10). 2 shares will be credited to your demat account, while for remaining 0.5, the payment will be credited to your primary bank account.
When will I receive the amount for fractional entitlement?
If there is any fractional entitlement, the equivalent amount will be directly credited to your primary bank account after the trustee appointed by the company sells the shares.
why such immediate action?