The stock of Butterfly Gandhimati seems volatile, rising and falling; it first opened over 2.5% at Rs.1299 but from there, it fell more than 5% to an intraday low at Rs.1200 and it is currently trading at Rs.1215.
The company announced a merger with Crompton Greaves, which is almost a year after Crompton had picked up controlling stake in the company. As per the scheme, the public shareholders of Butterfly will get 22 equity shares of Crompton for every five held by them in Butterfly.
The company expects the NCLT approval to come in by Q4FY24, which is a year later, after which the additional shares will be listed for trading.
It was in Feb’22 that Crompton took 55% stake in Butterfly; then it made an open offer in June’22 and hiked the stake to 81%. This was followed by an offer for sale of 6% stake in Sept’22, to trim down the holding to 75%.
As at 31st Dec’22, end of Q3FY23, public shareholding in Butterfly was at just 17.22%, Crompton held 75% and the promoter, the Chettiyar’s held 7.78%. Post merger, public shareholding of Butterfly in the combined entity will stand at 3%, Crompton at 97%.