The shares of Allcargo Logistics plummeted 28.5 percent in the morning trade on April 18, the ex-date for the company's proposed spin-off. The restructuring plan, which involves carving out two more firms, is aimed at decluttering the company and making it more structured.
The restructuring will also help Allcargo to adopt an asset-light model for its core business and unlock value for its demerged entities. Post the demerger, Allcargo Logistics will be split into three listed entities-Allcargo Logistics Ltd, Allcargo Terminals Ltd (ATL) and TransIndia Realty and Logistics Parks Ltd (TRLPL).
The company has set April 18 as the record date for the purpose of ascertaining the shareholders of the company who will be entitled to receive equity shares of ATL and TRLPL.
One fully paid-up equity share of the face value of Rs 2 each of ATL and TRLPL will be issued to the eligible Allcargo Logistics shareholders whose names appear in the register of members of the company as on the record date, for every one fully paid-up equity share of the face value of Rs 2 each held in the company.
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“Allcargo has announced spin-off of CFS and logistics parks business into two separate companies (1) Allcargo Terminals and (2) Transindia reality with ex-date of 18 April 2023, which has resulted in a price adjustment. We believe the price adjustment is in line with our estimates of Rs 63 for discontinued business. Post spin-off we expect improvement in return ratios for Allcargo and valuation re-rating,” Vikram Suryavanshi, Vice President – Institutional Equity Research, PhillipCapital, said.
At 11.04 am, Allcargo Logistics was up 2 percent on the BSE at Rs 275 but was trading 21 percent lower on the NSE at Rs 72.65.
Chief Strategy Officer Ravi Jakhar recently told Moneycontrol that the spin-off process was on track and the demerged companies would be listed in a couple of months.
The parent company, Allcargo Logistics, will lead the international supply chain solutions, express distribution, and contract logistics businesses. It will retain its ownership of shares in a global subsidiary, ECU Worldwide, Gati Ltd and also in the contract logistics division of Avvashya CCI.
ATL will consolidate its leadership position in the Container Freight Stations (CFS) space and continue to expand its footprint across India and abroad. The holding in Speedy Multimodes would be a part of ATL. On the other hand, TRLPL will include crane rental, logistics parks and other annuity businesses.
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