Shares of the smallcap household appliances company Butterfly Gandhimathi Appliances in morning deal on Tuesday (October 31) traded with a cut of 2.75 per cent at Rs 1137.05. The losses in the stock were triggered after the company’s amalgamation  with Crompton Greaves Consumer Electricals Limited (CGCEL) was voted against by the majority of the public shareholders of the company.

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“The scheme was, inter alia, subject to approval of (i) majority in number representing three-fourth in value of the equity shareholders (including public shareholders) of Butterfly; and (ii) majority of public shareholders of Butterfly,” the company’s filing with the exchange said.

Hence, due to the non-receipt of the necessary approval, the merger of Butterfly Gandhimathi and Crompton Greaves will not come into effect.

“This development will not have any significant change in our growth strategy. The companies will continue to operate as separate entities and work towards fulfilling their mutual strengths while they grow the kitchen appliances category in order to achieve the growth potential of each of the companies, thereby creating value for all the stakeholders, the company said in a regulatory filing.

On the development, shares of CGCEL did not see much impact and traded flat with a positive bias at Rs 283 per share.

In March 2023, CGCEL and Butterfly Gandhimathi Appliances announced a merger to accelerate and smoothen the realisation of synergies of the combined business.

Shares of Butterfly Gandhimathi in the last 1-year have given a negative return of 32 per cent.

Butterfly Gandhimathi is a small-cap home electronics and appliances company. With a market capitalisation of Rs 2027.54 crore, the company is engaged in manufacturing kitchen as well as other domestic appliances including LPG stoves, mixer grinders, LPG stoves etc.