“Companies normally take time, even after ex-date, to announce COA (cost of acquisition). Without this, trading apps can’t adjust the buy average price for holdings downward to account for the demerger. This increases the risk of a retail investor panicking and exiting after seeing an artificial loss,” Kamath said.
Ideally, he said companies should announce the cost of acquisition well in advance.
“It’s good that Reliance announced this before the market opened yesterday. But if companies start doing this well in advance, brokers can adjust the price and show the accurate P&L to investors even on the ex-date. Helps investors stay invested by removing a reason to panic,” he said.
The Zerodha co-founder took to Twitter to share the data on how many days companies take to announce the acquisition price in recent demergers.
While RIL announced the cost on the acquisition date, NIIT did it six days earlier, and NMDC did so 10 days in advance.
On the other hand, Allcargo Logistics took 34 days after the ex-date to announce the price, Shipping Corporation 42 days, and GHCL 29 days.
According to a regulatory filing made by RIL, the post-demerger acquisition cost for Reliance Strategic Investments, which is being renamed as JFSL, came to 4.68%. Considering Wednesday’s closing price of Rs 2,840 on BSE, the cost of the acquisition came to Rs 133.
At the end of a special pre-open session in shares of RIL, the JFSL share price was discovered at Rs 261.85 per share.
JFSL has been included in the Nifty50, Sensex, and other indices, and will remain at a constant price till the time the stock is listed independently.
The stock will be removed from all indices T+3 days post its listing. While a listing date is not yet announced, RIL is expected to provide a timeline for JFSL’s listing and a detailed strategy for the new entity at its AGM in the coming weeks.