IDFC Bank and Chennai-based Shriram Capital are toying with the idea of merger which is on cards for the two corporate houses. IDFC and Shriram Capital are gearing up for an all-stock merger.
After sluggish growth of IDFC for over 5 months, investors were finally happy with the breaking news which went viral yesterday, thereby boosting the confidence of IDFC investors.
The merger will turn out to be a treasure of prosperity and wealth for both the groups which will benefit hugely from the merger. The merger will result in a 60,000 crore financial merged entity.
Not only this, rumopurs suggest that IDFC may also include unlisted life and general insurance companies existent in the market.
Post-merger Scenario
If the expected merger takes shape and gets implemented successfully, the two major companies namely IDFC and Shriram Capital will emerge as holding companies of the to-be-merged entity.
Shriram Capital will host a Board meeting on Saturday. The meeting will be pertinent to the merger. The company had not given any acknowledgment for the meeting to avoid stock market volatility.
Positive after-effects of Merger
The merger will result in increasing the liquidity quotient of Piramal Enterprises, another major investor in the Sriram Capital. The merger will help IDFC expand its retail portfolio apart from accomplishing various financial inclusion targets set by the company’s bank subsidiary.
The merger news reflected positively on the stocks of these companies on the bourses. While Piramal Enterprise’s market capitalization crossed the 50,000 crore mark. Meanwhile, IDFC closed in red and hovered around Rs 59.95. IDFC Bank, however, soared by almost 2.5% to end at Rs 64.70.
