After striking a merger deal with ICICI Bank Ltd, Pravin Kumar Tayal, the main promoter of the troubled Bank of Rajasthan Ltd (BoR), said in an interview that he will now look to clear the charges against him. On Tuesday, India’s second largest lender announced a deal in which BoR stakeholders will get 25 ICICI Bank shares for every 118 BoR shares. Tayal, who cannot sell the ICICI Bank shares he will get, said the merger is cheaper than the HDFC Bank Ltd-Centurion Bank of Punjab Ltd deal in 2008 at a 1-for-29 swap ratio. Edited excerpts:
Your stock is seeing a sharp spike. You seem to have struck a good deal.
The bank, which was Rs6 crore in 1998, is today more than Rs5,000 crore. Of course, ICICI has got a deal at almost half the price.
Good deal: P.K. Tayal, main promoter of Bank of Rajasthan.
The market doesn’t seem to think so. In fact, the ICICI Bank stock is down.
The market always thinks about the top leader when he is dead.
Your stock is doing well but ICICI Bank’s isn’t.
The last time we had a deal (in the banking sector) with Centurion Bank of Punjab...it was Rs24 crore a branch. This deal has gone with Rs6 crore (a branch), which is almost free. So it’s good for everybody, good for employees.
How much do you hold in BoR currently?
Twenty eight per cent.
The Securities and Exchange Board of India (Sebi) is claiming you have 55% stake in BoR.
Time will clear that matter.
I am always with the regulator.
They know everything that is going on. It is known to them because we have RBI nominees on our board and it is totally involved.
One of the concerns for the market is over RBI orders for audits of BoR. Is there something more inside the bank that may not be that pleasant?
It is a 100% clean bank. The buyer is not a fool who has picked up a bank. The employees are there and it (BoR) cannot do anything below the table. The bank has worked hard and it is an honest bank. Hence, it has got this price.
According to Sebi sources, you won’t be able to sell the ICICI Bank shares you will get.
I don’t want to sell any shares. I didn’t sell any shares of BoR. It is just a swap ratio and I will keep those shares for my future.
Do you feel a person who is honest and hardworking would be shown the gate?
You were also under a question mark from regulators.
The regulators themselves have checked up. They are very capable and powerful. I fully respect and I have full confidence in their investigation and in their checking.
What is the timeline for this merger?
That is all to be decided by the bank’s board and their (ICICI) board. I am a shareholder. I do no have any seat on the board, so I may not be able to guide on such things.
How much you will hold in ICICI Bank and did you talk to any other players?
I have not calculated yet because the swap ratio is yet to be completed. So everything will follow in line soon.
Were there any other players you were talking to?
No, I was not wanting. This bank is like a child to me. I had never even dreamt of selling it or parting the debt.
What about the ban that Sebi has put?
Their misunderstanding will be cleared.
So that still exists at this point of time?
Yes, we will have to wait and by that time it will be cleared.
You said the valuation ICICI Bank is getting is far attractive than perhaps what others got for similar deals. What prompted you to initiate, in your own words, a distress sale in that sense?
After the deal we should be feeling comfortable and we should not be talking. I don’t want to show any of my anxiety or my regrets.
You are anxious but you are not showing it?
I shouldn’t be anxious at this price. A person who has built up this in the last 12 years should not be happy.
Can you elaborate a bit more on why you think it’s a great deal for ICICI Bank?
The world will come to know because what we have got is Kohinoor diamond. Everybody knew that I was not a seller and I did not want to sell. So, everybody will know what they got and this is an excellent deal for them.
Have you sold under duress?
I don’t want to comment on this.