Intimation under regulation 30 of SEBI LODR regulations - Scheme of Arrangement
MERCANTILE · price
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The Board of Mercantile Ventures has approved a Scheme of Amalgamation to merge India Radiators Limited (its subsidiary, in which it already holds 38.74% equity and 95.58% voting rights) into itself. Under the swap ratio, shareholders of India Radiators will receive 10 equity shares of Mercantile Ventures (face value Rs. 10 each) for every 36 equity shares of India Radiators (face value Rs. 10 each). India Radiators is a small company with total assets of Rs. 1,826.31 Lakhs, a near-zero negative net worth of Rs. 0.96 Lakhs, and turnover of just Rs. 4.74 Lakhs as of December 31, 2024, while Mercantile Ventures is much larger with total assets of Rs. 44,133.05 Lakhs and turnover of Rs. 5,292.37 Lakhs. Post-merger, India Radiators will be dissolved without winding up. The rationale cited is cost reduction, operational synergies, and consolidation of business. The swap ratio is backed by two registered valuers and fairness opinions from SEBI-registered merchant bankers. The scheme still requires approvals from the stock exchange, SEBI, shareholders, creditors, and the NCLT.
For Mercantile Ventures shareholders, the merger brings in a small, underperforming subsidiary with negligible net worth, so the financial impact is minimal. The deal mainly simplifies the group structure and reduces administrative costs. Shareholders of India Radiators will see their shares replaced with Mercantile Ventures shares at the stated swap ratio. Short-term stock reaction is likely muted given the small size of India Radiators relative to Mercantile Ventures; the NCLT approval process will take several months.