Aditya Birla Nuvo Share Price Drops 18%

Aditya Birla Nuvo share price dropped by more than 18 per cent and is currently after the announcement of the Grasim–Aditya Birla Nuvo merger. The dissatisfaction of the market was reflected in the share price of Aditya Birla Nuvo.

Grasim share price however is trading flat at Rs 4,559.50, though it has already fell by 12 per cent earlier when the market sensed an announcement of the deal was in the offing.

The two companies, Grasim and Aditya Birla Nuvo (AB Nuvo) entered into a two-way merger. The first step of this process involves merging the two companies and the second would be a spin-off of the financial division.

For every 10 shares of AB Nuvo, the shareholders will receive 3 shares of Grasim. After the merger when the financial services business is spun off, the shareholders of the merged Grasim will receive seven shares of Aditya Birla Financial Services – the arm which holds the insurance and asset management companies.

From the point of the shareholders of Grasim, they would continue to hold the same number of shares of the company as well as will also receive seven shares of Aditya Birla Financial Services. Thus a Grasim shareholder has nothing to lose. This explains why Grasim share price has held on though it did see a fall of about 12 per cent ahead of the announcement.

Aditya Birla Nuvo share price closed at Rs 1,276.80, down by 18.28 per cent. The intraday high and the intraday low were Rs 1,406.25 and Rs 1,176.75 respectively.The share price opened at Rs 1,276.80 from a previous closing of Rs 1,562.50.