Brokers trade at their computer terminals at a stock brokerage firm in Mumbai. Photo: Reuters
Shares of Ashok Leyland eased 3% and Hinduja Foundries slumped 20% on the BSE in early morning trade after the board of both these companies approved the proposal of amalgamating Hinduja Foundries with Ashok Leyland Limited, subject to various regulatory approvals and approval of shareholders.
Hinduja Foundries has locked in lower circuit of 20% at Rs 44 on the BSE with no buyers were seen on the counter. Till 09:30 am, a combined 323,580 shares changed hands and there were pending sell orders for 137,496 on the BSE and NSE.
The stock of Ashok Leyland was down 3% at Rs 82, after hitting an intra-day low of Rs 81 on the BSE. A combined 5.05 million shares changed hands on the counter on both the exchanges.
The board of directors approved the exchange ratio of 100 equity shares of Rs 10 each fully paid of Hinduja Foundries will get 40 equity shares of Re 1 each fully paid of Ashok Leyland.
Further, 1,000 of Hinduja Foundries’ 2008 series GDRs will get 133 equity shares of Re 1 each fully paid of Ashok Leyland. Also, one 2016 series GDRs of Hinduja Foundries will get 4,800 equity shares of Re 1 each fully paid of Ashok Leyland.
The amalgamation will result in operational efficiencies and help realise significant cost synergies, said Vinod K Dasari, chief executive officer and managing director, Ashok Leyland.
Hinduja Foundries is in the business of grey iron castings and supply of automotive components.