MUMBAI: Shares of IT firm CMC today fell sharply by over 16 per cent after announcement that the company will be merged with Tata Consultancy Services.
CMC's scrip tanked 16.25 per cent to Rs 1,832.05 on the BSE.
At the NSE, it slumped 15.88 per cent to Rs 1,831.65.
The stock came under massive selling pressure in a knee-jerk reaction to merger announcement and overall weakness in IT stocks.
The Board of Directors of CMC and TCS have approved the amalgamation of CMC with TCS pursuant to and subject to the provisions of Sections 391 to 394 of the Companies Act, 1956," CMC had said in a filing to the BSE yesterday.
CMC shareholders will get 79 equity shares of Re 1 each of TCS for every 100 equity shares of Rs 10 each of CMC, it had said.
The swap ratio has been arrived at based on the valuation report prepared by BSR & Associates LLP.
Tata Group company CMC also posted a 13 per cent increase in its September quarter net profit at Rs 76 crore.
CMC announced a consolidated operating revenue of Rs 617 crore, up 10 per cent over the same period last year, and posted an operating profit of Rs 104 crore, which is 18 per cent higher than last year.
The company's operating margin widened by 1.49 per cent, the release said without divulging the absolute number it has climbed up to.