Max India ~ BSE & NSE mess up post de-merger quoting & adjusted bands today !

Max India ~ BSE & NSE mess up post de-merger quoting today !

From today,Wednesday,January 27,2016 Max India has started quoting ex Scheme of Arrangement that will involves three Companies as below

  1. Original Listed Company Max India  renamed as Max Financial Services (MFS)
  2.  Resulting Company,Taurus Ventures to be listed later and renamed Max India (Max)
  3. Resulting Company Capricorn Ventures to be listed later and renamed as Max Ventures & Indutries (MVI)

Record Date is set for tomorrow Thursday,January 28,2016 for :

  • Resulting Company Max to issue 1 share of FV Rs 2 for every 1 share of FV Rs 2 held in Original Company now MFS
  • Resulting Company MVI to isuue 1 share of FV Rs 10 for every 5 shares of FV Rs 2 held in Original Company now MFS

MFS Shareholders will retain their original shares in MFS while being allotted the above shares in the Resulting companies

MFS closed on Monday,January 25,2016 on BSE at cum-spin off basis at Rs 471.65 while on NSE it closed at Rs 471.60

The Scheme of Arrangement is as on Net Assets on April 1,2015 and these were as below :

  • Original Listed Company MFS held Rs 3453.64 crs of Net Assets pre de-merger
  • MFS transferred Rs 1624.55 crs (47.04%) of  Net Assets as above to Resulting Company Max
  • MFS transferred Rs 183.92 crs (5.32%) of Net Assets as above to Resulting Company MVI
This left MFS with  Rs 1645.17 crs (47.64%) of Net Assets

Thus on a Net Assets Transfer basis if the Share Price closed at cum basis at Rs 471.65 levels ,it follows theoretically that on ex basis MFS should quote at 47.64% of Rs 471.65 ,that is & Rs 224.70 because a value of @ Rs 221.86 (being 47.04% of Rs 471.65) is attributed to the Share Value of the yet to be listed Resulting Company Max (earlier Taurus Ventures) & @ Rs 125 (FV Rs 10) is attributed to the Share of yet to be listed Resulting Company MVI ( earlier Capricorn Ventures) 

BSE & NSE have both got their adjustment Bands on the higher side,and thus create misleading price signals

Their Adjusted Price Bands are as below

BSE ~ Upper Circuit Rs 439.90 & Lower Circuit Rs 398.10 ~ Price is on lower circuit of Rs 398.10 since morning ! ~ It’s got to be ! 

NSE ~ Upper Circuit Rs 348.60 & Lower Circuit Rs 315.40 ~ Price after hitting a low of Rs 332 is on upper circuit of Rs 348.60! ~ It does not have to be !

What a farce ! ~ Lower Circuit on BSE & Upper Circuit on NSE with @ Rs 50 price difference between the two!

Who decides at BSE & NSE on such adjustments post spin offs ! ? ~ and why the significant variance between the two ! ?

Just does not make sense ,unless I’m missing something !

Thank God it’s not in the F & O Segment !

Ashish Chauhan of BSE & Chitra Ramkrishna of NSE I think you need to get me on board for guiding on matters such as this !

If I had shares of Max India ,now MFS,I would have strongly considered to exit at these price levels of even upper circuit of  Rs 348.60 on NSE  after standing in Q on lower circuit on BSE at Rs 398.10

What’s the Game in Max ! ?

Anybody care to enlighten me !?

SEBI?

 

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