# Why is my average rate incorrect after receiving shares from a merger/de-merger/amalgamation?

The average rate shown in your Portfolio on SELFIE / TraderX is taken from your Profit & Loss Statement on MyGeojit.

The average rate for shares acquired through corporate actions including mergers, de-mergers, amalgamations, etc., cannot be automatically calculated by the system. Hence, such transactions will have to be manually entered (by the client) on MyGeojit.

Refer to our article on how to update your average rate.

How to calculate your average rate:

For example, Mr. Ram buys 150 shares of Tata Steel BSL, at  Rs. 100 per share. Tata Steel announces an amalgamation of Tata Steel BSL (TS BSL) and Bamnipal Steel Ltd. (BSL) with it.

As per the Composite Scheme of Amalgamation:

For each equity share of Rs. 10 (each credited as fully paid-up by Tata Steel Ltd.), fifteen equity shares of Rs. 2 (each fully paid-up) can be held by an equity shareholder in TS BSL.

Therefore, for every 15 shares of Tata Steel BSL Ltd., Mr. Ram will receive 1 share of Tata Steel Ltd. Since he has 150 shares, he will receive 10 shares of Tata Steel Ltd.

Scenario A: Mr. Ram does not have any Tata Steel shares

After the amalgamation, his Portfolio will show 10 shares of Tata Steel .

If he doesn't update the actual average rate through MyGeojit, his Portfolio on the trading terminals will display the previous day's closing price as the average rate.

His actual average rate (as shown below) must be updated on MyGeojit.

 Particulars Quantity Average Rate Tata Steel BSL 150 Rs. 100 New Tata Steel holdings (shares acquired through the amalgamation) 150 / 15 = 10 (150 * 100) / 10= Rs. 1,500

Scenario B: Mr. Ram is holding Tata Steel shares in his demat account

In addition to 150 shares of Tata Steel BSL, Mr. Ram holds 10 shares of Tata Steel at an average rate of Rs.1400. Hence after the amalgamation, his Portfolio will show 20 shares of Tata Steel.

His actual average rate (as shown below) must be updated on MyGeojit.

 Particulars Quantity Average Rate Tata Steel 10 Rs. 1,400 Tata Steel 150 Rs. 100 Tata Steel (shares acquired through the amalgamation) 150 / 15 = 10 (150 * 100) / 10= Rs. 1,500 New Tata Steel Ltd Holdings 10 + 10 = 20 ((10 * 1,400) + (10 * 1,500)) / 20= Rs. 1,450

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