Once a Dolly Khanna favourite, Butterfly Gandhimathi gets hammered on D-Street after merger announcement

Butterfly Gandhimathi Appliances, once a favourite stock of ace investor Dolly Khanna, was hammered on Dalal Street on Monday, after the company announced a merger with Crompton Greaves Consumer Electricals. The stock of Tamil Nadu-based Butterfly Gandhimathi Appliances, operates in the kitchen and small domestic appliances, finished the day with a loss of Rs 47.2 or 3.7 per cent at Rs 1,219.1 apiece on BSE, after falling as much as 5.2 per cent during the session. 

On the other hand, Crompton Greaves Electricals shares gained 1.2 per cent to end at Rs 295.8 apiece on the bourse. 

What is the Butterfly Gandhimathi-Crompton Greaves Electricals merger?

Crompton Greaves Consumer Electricals and Butterfly Gandhimathi Appliances will accelerate and smoothen the realisation of synergies of the combined business, according to a joint statement. It will also simplify corporate and governance structure and convergence of public shareholders of Butterfly at the parent level and align interests for shareholders of both companies, it added.

This would be based on a share swap, it said. "Upon merger, the public shareholders of Butterfly as on the record date will receive 22 equity shares of Crompton for every 5 equity shares held by them in Butterfly, as a consideration for the merger." 

After the merger, the public shareholders of Butterfly will hold a stake of around three per cent in the combined entity. 

Butterfly Gandhimathi share price: Historical performance

Butterfly Gandhimathi shares have lost about 11 per cent of their value in the past one year, a period in which the headline Nifty index has declined one per cent.

Butterfly Gandhimathi was part of Dolly Khanna's portfolio until a year ago

Chennai-based investor Dolly Khanna had nearly a two per cent stake in the company as of March 2022, according to stock analysis portal Trendlyne. Khanna’s name, however, disappeared from the latest shareholding pattern of the company. In other words, she either has completely exited or reduced her stake below one per cent in Butterfly Gandhimathi.

In February 2022, Crompton Greaves had already acquired 81 per cent in Butterfly for Rs 2,076 crore. 

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