In most mergers and amalgamations, yes your existing shares are replaced by shares of the merged or surviving entity based on the swap ratio announced.
How the swap works
The swap ratio defines how many shares of the new company you’ll receive for every share you hold in the original company. For example, a swap ratio of 3:2 means you receive 3 shares of the merged entity for every 2 shares you currently hold.
The swap ratio is determined based on the valuation of both companies and is disclosed when the merger is announced.
What about fractional shares?
In some cases, the swap ratio results in fractional shares. Since fractional shares cannot be credited to a DEMAT account, companies typically pay out the fractional portion in cash.
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