Date : 27.2.12
Sesa Goa and Sterlite Industries plunged on Monday after Anil Agarwal-led metal and mining major Vedanta Group on Saturday decided to merge Sterlite Industries and Sesa Goa. Three shares of Sesa Goa will be issued for every five Sterlite shares.
Merger of Sterlite Industries and Sesa Goa will to create a USD 20 billion controlling entity for simplifying its group structure. It will lead to a new entity, Sesa Sterlite which will be the seventh largest natural resources company in the world.
While commenting on the merger, Jagannadham Thunuguntla, strategist and head of research, SMC Global Securities, ``Prima facie, this merger ratio appears to be slightly in favour of Sterlite shareholders. And it appears that the merger ratio is slightly detrimental to the Sesa Goa shareholders.``
``Vedanta Group stocks have historically got lower valuations due to complicated corporate structure. With this restructuring effort, there is an increased probability that the group may get positive rerating by the market,`` he added.
Sesa Goa declined Rs 18.4, or 8.09%, to trade at Rs 208.95. The total volume of shares traded was 1,051,935 at the BSE (Monday).
While commenting on the merger, Jagannadham Thunuguntla, strategist and head of research, SMC Global Securities, ``Prima facie, this merger ratio appears to be slightly in favour of Sterlite shareholders. And it appears that the merger ratio is slightly detrimental to the Sesa Goa shareholders.``
``Vedanta Group stocks have historically got lower valuations due to complicated corporate structure. With this restructuring effort, there is an increased probability that the group may get positive rerating by the market,`` he added.
Sesa Goa declined Rs 18.4, or 8.09%, to trade at Rs 208.95. The total volume of shares traded was 1,051,935 at the BSE (Monday).
Meanwhile, Sterlite Industries declined Rs 1.5, or 1.26%, to trade at Rs 117.15. The total volume of shares traded was 3,935,071 at the BSE (Monday).
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