Tribhovandas Bhimji Zaveri is now GRT's jewel

In today’s Finshots, we break down GRT Jewellers’ acquisition of Tribhovandas Bhimji Zaveri.But here’s a quick sidenote before we begin.

Most new parents are so caught up in the chaos of a newborn that insurance keeps getting pushed to “next month”.But next month has a way of becoming next year.That’s why we’re running a 2-day Insurance Masterclass, so you can finally stop postponing and understand what’s the best for you.We’ll break down health and life insurance in simple, jargon free steps so that you can avoid costly mistakes.📅 Saturday, 5th September at 11:00 AM: Life Insurance 📅 Sunday, 6th September at 11:00 AM: Health InsuranceOnly few seats left. 👉🏽Click here to save your spot.Now, on to today’s story.The StoryThis week, we’ve seen yet another important M&A deal after Happiest Minds and ITC Infotech.This one’s in the jewellery space. Tribhovandas Bhimji Zaveri, or TBZ, The Original, as you might popularly know it, is being taken over by GRT Jewellers, a Chennai-based jewellery brand known across South India.But as soon as news of the acquisition broke, the markets were asking two questions:Why sell a family business that has made its mark for over 160 years?And why sell it at a nearly 30% discount?Well, let’s answer the second question first. And it’s actually no rocket science.This is a private sale of a large 74% controlling stake valued at over ₹1,000 crore in a thinly traded company.

More on this story

TBZ has very little institutional ownership, and relatively few shares change hands every day. So while the stock may be trading at a certain price, that price is based on relatively small quantities of shares being bought and sold. But it doesn’t necessarily mean that there are enough buyers willing to buy shares worth thousands of crores at that same price.And if the promoters tried to sell their entire stake in the open market, the sheer supply of shares hitting the market could push the stock price down sharply.That’…