Has anybody gone through this deal announced by $Sundaram Clayton Ltd (SCL). From what I have understood it’s pretty cool way of paying out shareholders.

SCL now has got truck loads of cash. It got 1500 crore plus by selling approx 5% of TVS motors (of which it’s a promoter) in June, 2021 & bunch of mutual funds bought the shares from SCL.

SCL is now doing one unique thing for paying this whole thing out.

Its issuing 116 per share as bonus redeemable preference share of Rs.10 each. In short one gets Rs. 1160 worth of some debt thing which pays 9% pa for two years & then gets fully reedemed.

So, SCL trades at approx 4000 bucks & one gets 1160 back that’s like 25% back no!

Also, it has a separate die castings business which will get emerged into a separate entity.

And since its parent company of TVS motors with 52% holding. TVS motors market cap as of today is 31000 cr plus. Applying 60 % hodco. disc one gets value of 6400 Cr for SCL. Thts another Rs.3200 per share.