Why is my average rate incorrect after receiving shares from a merger/de-merger/amalgamation?
The details of shares received through off-market transfers, dematerialization, IPOs, or corporate actions such as rights issues, mergers, etc., cannot be determined by the system. Similarly, in cases where there is a short delivery of shares resulting in an auction, the transaction will reflect as a sell entry followed by a buy entry through the auction. This can break the FIFO chain, making it difficult for the system to determine the correct purchase rates. Hence, such transactions need to be manually entered and updated by the client in MyGeojit to ensure that the correct cost and transaction details are reflected.
Scenario A: Mr. Ram does not have any Tata Steel shares.
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.
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.
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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