IDFC First Bank slips, IDFC surges to new heights after merger approval
IDFC First Bank's shares declined by 6 per cent while IDFC's shares surged by 6 per cent following the board's approval of a reverse merger.
- Republic Business
- 1 min read
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Shares of private lender IDFC First Bank fell as much as 6 per cent on Tuesday, while those of IDFC rose as much as 6 per cent after the bank's board on Monday approved a reverse merger of the two firms in a bid to simplify their corporate structure and ease regulatory compliance.
Under the proposed deal, non-bank lender IDFC's shareholders will receive 155 shares of IDFC First Bank for each set of 100 shares they currently own in the former, valuing the deal at Rs 127.02 per share, a 16.3 per cent premium to IDFC's last close.
IDFC stock hit an all-time high, while IDFC First Bank had its steepest intraday decline since December last year.
The merger announcement comes days after Housing Development Finance Corp merged with HDFC Bank in a $40 billion deal, the largest in country's corporate history.