Ashok Leyland rated ‘Buy’ by Motilal Oswal

Ashok Leyland’s board has approved the merger of Hinduja Foundries Ltd (HFL), the group company supplying cylinder blocks and heads to AL. The merger would result in 2.8% dilution and increase the promoters stake to 51.3%. The swap ratio implies discount of 38% to HFL’s closing price of R54.5 on 14/Sep/16. Though the materiality of this deal might be low, it deviates from the management’s stated objective of streamlining AL’s balance sheet. Read More