CMC slumps as company to amalgamate with TCS

CMC slumped 13.34% to Rs 1,895.85 at 10:07 IST on BSE after the board of directors of CMC and TCS have approved the scheme of amalgamation of CMC with TCS.

The company made this announcement after market hours on Thursday, 16 October 2014.

Meanwhile, the BSE Sensex was up 36.27 points, or 0.14%, to 26,035.61.

On BSE, so far 19,573 shares were traded in the counter, compared with an average volume of 4,254 shares in the past one quarter.

The stock hit a high of Rs 2,050 and a low of Rs 1,867.30 so far during the day. The stock hit a record high of Rs 2,403 on 8 September 2014. The stock hit a 52-week low of Rs 1,259.55 on 26 November 2013.

The stock had underperformed the market over the past one month till 16 October 2014, falling 3.25% compared with 1.86% fall in the Sensex. The scrip had, however, outperformed the market in past one quarter, rising 10.54% as against Sensex's 1.76% rise.

The mid-cap stock has an equity capital of Rs 30.30 crore. Face value per share is Rs 10.

CMC reported 30.07% rise in consolidated net profit to Rs 75.99 crore on 4.05% growth in income from operations to Rs 616.68 crore in Q2 September 2014 over Q1 June 2014. The result was announced after market hours on Thursday, 16 October 2014.

Meanwhile, TCS and CMC in a joint statement after market hours on Thursday, 16 October 2014, said that the board of directors of TCS and CMC, a subsidiary of TCS, at a meeting held on Thursday, 16 October 2014, have approved the scheme of amalgamation of CMC with TCS. As per the terms of the scheme, 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.

TCS held 51.12% in CMC as at 30 June 2014.

Mr. S Ramadorai, who has been Chairman of CMC from 16 October 2001 when Tata Sons acquired majority stake in CMC, will step down as Director and Chairman with effect from 17 October 2014, having attained 70 years of age recently.

The board of directors also inducted Mr. N Chandrasekaran, CEO and Managing Director of TCS, as Director of CMC. He will take over as Chairman of the company from 17 October 2014.

CMC is a systems engineering and integration company, offering application design, development, testing services and asset-based solutions in niche segments through turnkey projects for mission critical systems. CMC has also been expanding its service presence in international markets offering offshoring advantages and delivering value through service level-based and project scope-based deliveries.

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