- Edible Oil plant/brands from Amrit Corp for Rs 220 crores cash, and assuming the debt of Rs 40 crores and letting them keep Rs 25crores cash=>Rs 285 crores deal value in all. Structured as a slump sale under tax laws, leading to a profit of Rs 231 crores for tax purposes over book value
- Purchasing a brand from Amrit Banaspati for Rs 104 crores. Structured as a straight assignment
- factored a tax rate of 20% for both transactions
- Did not assign a value to residual fixed assets/business assuming them to be loss leaders. That assumption seems fair since Bunge would have purchased the core of the business anyway.
- Did not do simultaneous equation for Amrit Corp's 23% stake in Amrit Banaspati, instead just took the value at mcap without holding company discount.
The above upside would come only
- IF the promoters can return the cash(unlikely since they own 70% and would prefer to take it out in other means rather than incur 19% dividend distribution tax) OR
- If they can grow the money at an ROE exceeding the opportunity cost of shareholders(WACC)