Tata Global’s Scheme Of Arrangement With Tata Chem Comes Into Effect

Tata Group companies, Tata Global and Tata Chemical continued their successful run on the bourses since the receipt of approval for the scheme of arrangement from the company regulator – the National Company Law Tribunal (NCLT).

The scheme has come into effect as both the companies have filed the Certified Copy of the respective NCLT Orders sanctioning with the respective jurisdictional Registrar of Companies.

This augurs well for Tata Global, as it will benefit from higher revenue generation and a resultant improvement in its valuation.

Once the record date is announced, Tata Global is likely to get included in the MSCI. Post the merger, Tata Global Market capitalization will get increased to Rs 36,600 lakh crore.

Foreign Institutional Investor (FII) holding limit is 35% while the free float will be $25 billion, this would imply a buying of 1.43 crore share.

The Index Market cap will be Rs 12,800 crore and hence it is likely to get included with a weight of 0.32%.

In May last year, Tata Group had decided to demerge the consumer business of Tata Chemicals and merge it with Tata Global Beverages. Tata Global Beverages will be renamed as Tata Consumer Products, the group had announced.

Under the scheme, every shareholder of Tata Chemicals will get 1.14 new equity shares of Tata Global Beverages for every one equity share held in Tata Chemicals. It means that shareholders having 100 shares in Tata Chemicals will receive 114 shares in Tata Global Beverages.

The management said the combination of the two consumer-focused businesses will benefit both sets of shareholders who will be able to participate in a larger business poised to grow their share of the foods & beverages market with a broader exposure to the attractive and fast-growing FMCG sector.

Tata Chemicals shareholders will retain their ownership of a focused science-led chemistry solutions and specialty products company with a leading portfolio of products in basic and specialty chemicals and strong cash flows to support future growth.

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