Apportionment of cost of acquisition of Equity Shares of Valor Estate Limited and Advent Hotels International Limited
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Valor Estate Limited (formerly D B Realty) has completed the demerger of its hotel business into Advent Hotels International Limited (AHIL) under a Composite Scheme of Amalgamation and Arrangement sanctioned by NCLT Mumbai on 12th June 2025, effective from 1st July 2025. Shareholders received 1 equity share of AHIL for every 10 shares of Valor Estate held as on the record date of 18th July 2025. The original cost of acquisition should be split 81.47% to Valor Estate shares and 18.53% to AHIL shares. The demerger qualifies as tax-neutral under Section 2(19AA) of the Income Tax Act, meaning shareholders are not taxed on the share allotment. Shareholders are advised to consult their own tax advisors for individual implications.
Shareholders now hold shares in two listed entities (Valor Estate and AHIL) and must reallocate their original purchase cost for future tax calculations on sale. The tax-neutral nature of the demerger protects shareholders from immediate tax liability on the share entitlement. Investors should update their portfolio records and track both stocks separately going forward.