I have a query related to "Cost of Acquisition after Merger". The following is the descripttion of the issue.
I have bought
1.Purchase of Shares
Deep Energy Ltd - 1110
Avg Price - 275
Date of Purchase - 18-06-2017
The stock got de-merged as follows:-
2. De-Merger Details
Record Date - 11 Nov 2020
Ratio - 1:1
Cost of Acquisiton - 85.15:14.85
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Deep Energy Ltd - 1110
Avg Price - 40.84
Deep Industries Ltd - 1110
Avg Price - 234.16
3.Stock Split
Record Date - 10th April 2023
Ratio - 1:2
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Deep Industries Ltd - stock split from 1110 to 2220
4.Merger
Record Date - 25 Sep 2024
Ratio - 8:11
Deep Energy Ltd 8 Shares to 11 Shares of Prabha Energy Ltd
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Prabha Energy Ltd - 1526 shares allocated against 1110 shares of Deep Energy Ltd and Deep Energy Ltd shares got delisted.
Note: Deep Energy Ltd Share Price on 31st Jan 2018 - Rs.210.85
My query is related to the 4th point - Merger - Cost of Acqusition. How to calculate the right cost of acquisition in this situation?
Also, which price to consider for LTCG while selling the shares later on for Prabha Energy Ltd?
Awaiting your valualbe feedback.
CAclubindia
