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Kripa Raman

Mumbai , Aug. 24

THE UltraTech Cemco stock made its debut on the stock exchanges on Tuesday, closing at Rs 260.35 per share on the BSE and Rs 268.82 on the NSE.

With this, both Grasim Industries and L&T appear vindicated in their stand that the demerger of UltraTech Cemco from L&T, the demerger ratios, and the open offer price for UltraTech from Grasim would be to the benefit of L&T shareholders and later, UltraTech shareholders.

Grasim Industries had made an open offer at Rs 342 per share to UltraTech shareholders.

The L&T scrip itself closed at 825.05 today, giving much relief to those who held on to their shares just before trading in the stock was temporarily suspended on the stock exchanges in May, pending the demerger.

At that time, shareholders were in a quandary over whether L&T would fetch as much when it resumed trading, post demerger, and when Cemco also got listed.

This doubt followed the calculation that 100 L&T shares would fetch 40 shares of Cemco of face value Rs 10 each, and 50 L&T shares of face value Rs 2 each.

At the time of suspension of trading in L&T, the value of the scrip was around Rs 500. So, 100 shares would have worked out to a market value of Rs 50,000.

If an investor had tendered 40 Cemco shares in Grasim's open offer at Rs 342, he would have got Rs 13,680. For his market value for 100 shares to be the same as Rs 50,000, the 50 L&T shares he would be left with would have to fetch Rs 36,320, or Rs 726.4 per share.

Whether L&T could list at Rs 726.4 per share when it resumed trading after Cemco was separated was a moot point. And what would Cemco itself list at?

Even analysts had said that Rs 700 seemed very high, even though the L&T stock was expected to increase from Rs 500 on account of Rs 1,750 crore of debt being off its books after the demerger of Cemco.

Now, not only has L&T exceeded Rs 700 on the market, UltraTech itself has listed below Grasim's offer price of Rs 342.

As of today, those who held on to their L&T shares as well as those who tendered their shares in Cemco would have no complaints, said an industry analyst.

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