Shares of TCS subsidiary CMC slumped today after its merger announcement with its parent. CMC shares fell over 15 per cent today to a day low of Rs 1,832.05 today. TCS shares fell over 8 per cent today after its Q2 numbers lagged analyst estimates.
The boards of CMC and TCS have agreed to a merger, with CMC shareholders getting 79 equity shares of TCS for every 100 equity shares held. The merger was announced after market-hours yesterday. CMC was valued at Rs 2,116, which is below its yesterday's closing price. CMC shares closed at Rs 2,187.65 on the BSE yesterday while TCS at Rs 2,678.85. Maybank Kim Eng has downgraded CMC shares to hold from buy, with target price at Rs 2,214.
TCS, which had reported its numbers after market-hours on Thursday, posted net profit of Rs 5,288 crore in the September quarter, below the average analyst forecast of Rs 5,384 crore (Reuters estimate).
IT stocks came under sharp selling pressure on Friday after heavyweights such as after Tata Consultancy Services and HCL Tech tumbled sharply after their quarterly earnings missed estimates.
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