Ambuja Cement is the top loser on the BSE today, currently down almost 13% at Rs.166.95, with an intra day low at Rs.163.20. This was very close to its 52-week low of Rs.162.50.

The stock has tanked post the ACC-Ambuja deal, a very complex designed deal. The shareholders of Ambuja seem to have got  short changed and this is reflected in the stock price today.

As per the deal:

1:Ambuja Cements will first acquire 24% stake in Holcim India from Holderind Investments, Mauritius, for Rs 3,500 crore.

2: Holcim India will then be merged into Ambuja which will result in Ambuja holding 50% stake in ACC, in which Holcim India currently holds 50.01%.

3: The merger swap has been fixed at one Ambuja share for 7.4 Holcim India shares. This means a swap ratio of 6.6 Ambuja shares for every ACC share held.

4: Based on the swap ratio, Ambuja will issue 58.4 crore new equity shares of the company to Holcim as a consideration for the merger.

5:Post merger, Holcim will own 61.39% of Ambuja which, in turn, will own 50.01% in ACC.

The market is angry with this deal because as per this deal, all cash on the books of Ambuja cement will get transferred to the parent Holcim. At the end of FY13, Ambuja had cash of Rs.3700 crore and this will now all go to Holcim. And Holcim also gets a higher stake in the merged entity which in turn does not bring anything on the table for ACC.