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Gruh Finance shares slump 16%, Bandhan Bank dips 6% as share swap ratio seen unfavourable

Gruh Finance shares slump 16%, Bandhan Bank dips 6% as share-swap ratio seen unfavourable

Gruh Finance shares slump 16%, Bandhan Bank dips 6% as share-swap ratio seen unfavourable
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By CNBC-TV18 Jan 8, 2019 2:59:44 PM IST (Updated)

Shares of Gruh Finance plunged more than 16 percent to hit an intra-day low of Rs 256 as the share-swap ratio for the merger of the company with Bandhan Bank was seen unfavourable.

Shares of Gruh Finance plunged more than 16 percent to hit an intra-day low of Rs 256 as the share-swap ratio

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for the merger of the company with Bandhan Bank was seen unfavourable.

Likewise, Bandhan shares touched an intra-day low of Rs 470.85, dipping more than 6 percent. The large-cap private bank's share has fallen over 14 percent in the last 5 days, while Gruh Finance stock has been losing for the last 3 days and has fallen 19.50 percent in the period.
The Bandhan-Gruh share-swap deal outlines that shareholders of Gruh Finance will receive 568 shares of Bandhan Bank for every 1,000 shares held. The given ratio values the housing finance company at a 7 percent discount to its market capitalisation of Rs 22,440 crore as on Monday.
The effective date of the merger shall be January 1, 2019, subject to regulatory approvals.
CNBC-TV18 was the first to report the talks between Bandhan Bank and Gruh Finance on the merger.
Gruh Finance, owned by HDFC Ltd, has total assets of Rs 15,970.97 crore with turnover of Rs 1,687.19 crore and net worth of Rs. 1,380.92 crore as on March 31, 2018.
Bandhan Bank has total assets of Rs 44,310.06 crore, turnover of Rs 5,508.48 crore (includes other income) and net worth of Rs 9,382 crore, as on March 31, 2018.
Last year, RBI had imposed restrictions on Bandhan Bank's branch expansion after it failed to pare promoters' stake to 40 percent from close to 82 percent, within the stipulated three-year time frame.
As per RBI shareholding norms, every bank or any firm which directly owns stake in a bank, whether it is listed or unlisted, has to reduce stake gradually to 10 percent.
At 3 pm, Bandhan Bank traded at Rs 478, lower by 4.03 percent, while Gruh shares slipped 16.08 percent to trade at Rs 257.10.
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-with inputs from agencies
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