Question

Using the same 3rd December 2003 stock price data, SIFY's BSE opening price was Rs 232 and its BSE closing price was Rs 247.

In an M&A deal, SIFY is purchased by its parent company SATYAM, which purchases 15% of SIFY's equity shares. Total SIFY equity shares are 1 million. How much does Satyam pay in rupees for the stake if 50% of its purchases were on BSE's opening price and the balance on BSE's closing price?

• A. 36 million
• B. 3.5 million
• C. 363 million
• D. 217 million

Hint:

Find the number of shares bought (15% of 1 million), split that into two equal halves, and value each half at its own BSE price before adding, or equivalently multiply the total shares by the average of the two prices.

Answer 1

The Correct Option is A

Step 1: Understanding the Question:
Satyam buys 15% of SIFY's total shares, and this purchase is split evenly between two different price points on BSE. We need the total rupee amount paid.

Step 2: Key Formula or Approach:
First find the number of shares bought, split that number 50-50 across the two prices, then value each half separately and add.

Step 3: Detailed Explanation.
Total shares purchased \( = 15\% \times 1{,}000{,}000 = 150{,}000 \) shares.
Half of these, that is 75,000 shares, are bought at the BSE opening price of Rs 232: \[ 75{,}000 \times 232 = 17{,}400{,}000 \text{ Rs} \]
The other half, another 75,000 shares, are bought at the BSE closing price of Rs 247: \[ 75{,}000 \times 247 = 18{,}525{,}000 \text{ Rs} \]
Adding these two amounts gives the total payment.

Step 4: Final Answer:
Total payment \( = 17{,}400{,}000 + 18{,}525{,}000 = 35{,}925{,}000 \) Rs, which is approximately Rs 36 million.
\[ \boxed{36 \text{ million}} \]