Induslnd bank clears deal for merger with Bharat Financial Inclusion
The merger between Bharat Financial Inclusion and IndusInd bank has been given a big push today further sealing the deal to merge the two entities.
- IndusInd bank officially notified its shareholders of the approval of the merger with BFIL in September.
- The bank will have 1400-1500 branches after the merger.
- The deal is speculated to help IndusInd bank scale up its microfinance operations.
Mumbai based IndusInd bank on Saturday has pushed ahead in the process of merging its wholly owned subsidiary bank with Bharat Financial Inclusion Ltd, a non-banking finance company.
At the board of IndusInd bank’s meeting on October 14 the company said in a BSE filing that it has approved a ‘composite scheme of arrangement,’ between the companies."The merger will be effected through an all-stock transaction of Bharat Financial Inclusion Limited into IndusInd through a Composite Scheme of Arrangement (Scheme)."
“The composite scheme will be filed with the designated Stock Exchange as per the applicable provisions of Regulation 37 of the SEBI Regulation, 2015, following receipt of the RBI approval,” the company said.
The scheme is estimated to take effect from January 1.
Speaking at a press conference in Mumbai, IndusInd CEO, Romesh Sobti said the bank will have 1400-1500 branches after the merger. The merger won't change board composition and neither result in job losses, Sobti said.
IndusInd and BFIL merger could also lead to 3-4% savings on fund costs. The total process of the merger could take another 9-10 months for completion, Sobti added.
“The Board of the Bank believes that the composite scheme of arrangement relating to the merger of these two illustrious institutions will add value to all stakeholders and the Bank,” said R. Seshasayee, Chairman, IndusInd Bank.
The deal values Bharat Financial at Rs 1,118 apiece, a premium of 11.5% over the last closing price, a report by BloombergQuint said.
In September the bank had informed its shareholders that the board of directors had approved entering into a merger agreement with Bharat Financial Inclusion.
The deal is speculated to help IndusInd bank scale up its microfinance operations.
“The share exchange ratio for the amalgamation of BFIL with the bank shall be 639 equity shares of the bank for every 1000 equity shares of BFIL,” IndusInd said.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.