Ashok Leyland board gives approval for merger with NXTDigital; latter's stock zooms ~3%

17 Aug 2022 , 10:49 AM

 Board of Directors of Ashok Leyland have approved the proposed Scheme of Arrangement between NXTDigital and Hinduja Leyland Finance Limited (HLFL) and their respective Shareholders, subject to regulatory and shareholder approvals.

The proposed HLFL merger scheme will take effect once the ongoing scheme of transferring the “Digital Media & Communications Business undertaking” into Hinduja Global Solutions Limited (HGSL) is completed.

With an AUM of over Rs29,000 crore and a pan-India presence in 1,550 locations across 23 states and two union territories, HLFL is one of India’s leading finances NBFCs.

HLFL finances a wide range of commercial and personal vehicles through a vast network of branches, including medium and heavy commercial vehicles, light commercial vehicles, and small commercial vehicles, as well as cars, and multi-utility vehicles, three-wheelers, and two-wheelers, as well as various types of used vehicles. HLFL is an Ashok Leyland Limited subsidiary.

Further, the board also approved the exchange ratio for the proposed merger based on the valuation exercise carried out and recommended by two independent valuers, M/s KPMG Valuation Services LLP and M/s SSPA & Co., Chartered Accountants.

According to the valuation, HLFL shareholders will receive 23 fully paid equity shares with a face value of Rs10 per share in NDL for every 10 fully paid equity shares with a face value of Rs 10 held by them in HLFL.

The company believes that on completion, the proposed merger will fuel the expansion plans of both companies.

The proposed Scheme is subject to all shareholder and regulatory approvals, as well as National Company Law Tribunal approval (NCLT).

At around 10.52 AM, NXTDigital was trading 3.21% higher at Rs433.50, against previous close of Rs420 on NSE. So far, it hit intraday high and low of Rs447.70 and Rs432.65 respectively.