CMC falls apart

CMC is currently the top loser on the BSE, down by a whopping 15% at Rs.1866.60 and it remains deeply embedded in the red.

The stock is reacting strongly to the news of its amalgamation into TCS. The market is very unhappy about this development, especially for CMC as the swap ratio is not too lucrative. Shareholders of CMC other than TCS will receive 79 equity shares of Rs.1 each of TCS for every 100 equity shares of Rs.10 each of CMC held by them. The appointed date for the proposed scheme is 1 April.

And in this merger, the results of CMC, which were otherwise pretty good have become meaningless. The company, where TCS currently holds 51% stake, posted a 13% jump in net profit at Rs.76 crore, much higher than most estimates.

Our Editor, Mr.SP Tulsian has advised those holding CMC to exit