Calcutta, July 2: Emami Group is making a fresh attempt to consolidate its real estate empire by merging its two listed entities.

The Calcutta-based conglomerate, having interest in FMCG, cement, edible oil, paper and healthcare, has proposed to dissolve Zandu Realty into Emami Infrastructure Ltd (EIL).

The board of directors of the two companies met on Saturday to propose the amalgamation where Zandu shareholders will get 7 shares of EIL of face value of Rs 2 for every share of face value of Rs 100 held on the record date. The merger scheme is subject to approval by shareholders, market regulator Sebi and the National Company Law Tribunal, among others.

The EIL stock closed at Rs 147.90 on Friday on the BSE, while Zandu Realty ended the day at Rs 1,242.9 apiece.

A back-of-the-hand calculation suggests that a Zandu shareholder will get shares worth Rs 1,035.3 if the proposed swap ratio is maintained.

However, in a detailed presentation to the bourses, EIL noted that the merger would lead to a reduced combined paid-up capital as its 35.51 per cent holding in Zandu will be extinguished after the merger.

EIL now holds 2,86,329 equity shares in Zandu. The reduced capital will lead to higher earning per share, EIL said.

A higher EPS usually leads to expansion of the price earnings ratio and increase in the stock value.

The promoters' share will fall to 50.49 per cent from 58.06 per cent after the merger, while public shareholding will increase to 49.51 per cent from 41.94 per cent.

In the past, the group had proposed to merge Zandu Realty but could not cross the regulatory hurdle.

In 2011, Emami Group wanted to merge Emami Realty Ltd, an unlisted subsidiary of listed Emami Infrastructure, with Zandu Realty, a listed entity.

However, the merger was called off on November 12, 2014.

Market regulator Sebi had balked at the scheme, raising several questions on the rational of merging a listed entity with an unlisted firm from the point of view of the shareholders of Zandu.

Zandu Realty came into being after the acquisition and merger of Zandu Pharmaceuticals Ltd with Emami Ltd, the flagship of the group.

After buying the Mumbai-based ayurveda maker for Rs 750 crore through a successful hostile takeover, Emami spun off the real estate asset into Zandu Realty and merged the rest of the consumer goods business with itself.

The most valuable asset of Zandu was the property at Mumbai suburb Dadar. After developing the Zandu Sigma Estate, the company has now parked its funds with investment securities. The net worth of Zandu was Rs 187.8 crore as on March 31, 2017 compared with Rs 26.07 of EIL.

In contrast, Emami Infrastructure, which clocked a turnover Rs 118.35 crore, has several projects across India and aggressive growth plans.

In March, it announced a seven-acre residential project at Mulund in Mumbai. The company also has projects in Hyderabad, Chennai and Coimbatore. It has also acquired 12,000 acres in Madurai for a composite all-round development in phases.