T Ltd., a listed company on stock exchange, currently has 84% promoter holding i.e. 126 Lakh shares. Profit after Tax is 9.60 Crores. Free Float…

CA Final · Advanced Financial Management · PYQS · January 2026
T Ltd., a listed company on stock exchange, currently has 84% promoter holding i.e. 126 Lakh shares. Profit after Tax is 9.60 Crores. Free Float market capitalization is 38.40 Crores. As per SEBI guidelines promoters have to restrict their holding to 75% to avoid delisting from the stock exchange. Board of Directors has decided not to delist the share but to comply with the SEBI guidelines by issuing bonus shares to minority shareholders while maintaining the same P/E Ratio. You are required to calculate: (i) P/E Ratio (ii) Bonus Ratio (iii) Market price of share after Bonus issue (iv) Post bonus Free Float Market Capitalization.

Suggested Answer and Working Notes:

(i) P/E Ratio: % of holding No. of Shares Promoter's Holding 84% 126 Lakh Minority Holding 16% 24 Lakh Total Shares 100% 150 Lakh Free Float Market Capitalization = 38.40 crores Hence Market price = 38.40 crores / 24.00 Lakh = 160 per share EPS (PAT/No. of Shares) (9.60 crores /150 Lakh) = 6.40 per share P/E Ratio (160/6.40) = 25 (ii) No. of Bonus Shares to be issued: Promoters holding 84%, = 126 Lakh shares Shares remains the same, but holding % to be taken as 75% Hence Total shares = 126 Lakh / 75% = 168 Lakh Shares of Minority = 168 Lakh - 126 Lakh = 42 Lakh Bonus 18 Lakh for 24 Lakh / 3 bonus for 4 held / 0.75 shares for 1 share (iii) Market price before & after Bonus: Before Bonus = 160 per share After Bonus New EPS = 9.60 crores / 168 Lakh = 5.71 New Market Price (25 x 5.71) = 142.75 (iv) Free Float Capitalization is 142.75 x 42 lacs = 59.9550 crores

Topics: Mergers, Acquisitions and Corporate Restructuring

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