Stocks were locked at 5 percent lower circuit from opening price and sharply lower from previous close, but investors who hold shares are still profitable in their investment.
The previous price taken to compare with current price is the closing price of October 29, 2018, the day before ex-date. CESC went ex-date for demerger on October 30, 2018 and the record date for the same was fixed as October 31.
On ex-date, CESC was down 17.4 percent to Rs 713.65 on the NSE.
The closing price as on October 29 was Rs 864.
Meanwhile, CESC Ventures shares opened the first trading session at Rs 545, down 37 percent and Spencer's Retail started the day at Rs 225, down 74 percent on the National Stock Exchange.
CESC Ventures stock hit an intraday high of Rs 548 and low of Rs 517.75, which was also the lower circuit from opening price while Spencer's Retail touched a day's high of Rs 225 (the opening price) and low of Rs 213.75, the lower circuit.
The exchange has fixed 5 percent range for upper and lower circuit from the opening price for both stocks.
The non-power investments of CESC was demerged into two entities as planned in the scheme, viz. new Retail and Venture companies. Now, there are three companies, viz. CESC (power company), Spencer's Retail (retail arm) and CESC Ventures (venture subsidiary).
"The above restructuring will result in benefits for all shareholders. It will allow unlocking value for the investors, give a focused management attention to each of the verticals to pursue respective growth plans and allow the new entities to take advantage of the market values of Retail, FMCG and IT business," CESC had said.
As per the scheme of demerger, each existing shareholder of CESC, for every 10 of his holding, allotted additional 6 shares of Rs 5 each in Spencer's Retail and additional 2 shares of Rs. 10 each in CESC Ventures.
The paid up equity share capital of Spencer's Retail & CESC Ventures is Rs 40 crore and Rs 26 crore respectively, over and above the equity share capital of CESC of Rs 132 crore.
Stocks were locked at 5 percent lower circuit from opening price and sharply lower from previous close, but investors who hold shares are still profitable in their investment.
If one has 100 shares on the record date, the actual holding value comes to Rs 86,400 at a price of Rs 864 (October 29's closing).
Today the CESC's opening price is Rs 685, the value of those 100 shares comes to Rs 68,500. Considering the demerger ratio, the value of Spencer's Retail at opening price for 60 shares (instead of 6 shares considered for demerger by the company) is Rs 13,500 (Rs 225 X 60 shares) and CESC Ventures for 20 shares is Rs 10,900 (Rs 545 X 20 shares).
The total value of investment comes to Rs 92,900 (Rs 68,500 + Rs 13,500 + Rs 10,900) against Rs 86,400 (value of CESC before demerger) and the profit on investment at Rs 6,500 for those 100 shares is still positive.
At the time of publishing this copy, CESC was quoting at Rs 690.10 on the NSE, up 0.7 percent.
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