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Merger or Demerger
A merger is when two or more companies combine into one to pool resources and operations, while a demerger is when a company splits into separate entities to focus on different businesses.
A merger/demerger involves several steps and hence takes time. Here’s what you should know:
- Process & Timeline
- The company must first get legal and regulatory approvals.
- A record date is fixed to determine which shareholders are eligible.
- Only after this, the new shares are allotted and later listed on the exchange. This is why shares may not appear in your demat immediately.
- Eligibility
- If you held the company’s shares in your demat account on the record date, you are automatically eligible to receive the new shares.
- How to Confirm if a Merger/Demerger Happened
- Visit the company’s official website → Investor Relations / Announcements.
- Check your registered email inbox for company updates.
- Go to NSE/BSE websites → Search your company → View Corporate Announcements.
- Impact on Your Existing Shares
- Your old shares are either converted into the new merged entity’s shares or adjusted as per the demerger ratio. Any change reflects automatically in your demat once the process completes.
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