Mumbai: Shares of Kolkata-based Bandhan Bank Ltd on Friday surged 20% amid reports that the the lender will be added in the MSCI Index with effect from 16 October.
According to Motila Oswal Financial Services, this is due to Gruh Finance's merger with Bandhan Bank. The move is likely to result in $180 million woth of inflows, according to the brokerage firm.
Intra-day, Bandhan Bank gained 20% to hit a high of ₹608.30 on the BSE, while Gruh Finance rose 20% to ₹327.30. At 10.18am, Bandhan Bank advanced 12.6% to ₹570.65, while Gruh was at ₹302.05, up 10.7%.
The National Company Law Tribunal recently cleared the scheme of amalgamation between Kolkata-based Bandhan Bank and Ahmedabad-based Gruh Finance. The scheme was approved by NCLT's Kolkata and Ahmedabad benches and 17 October was fixed as the record date for the effective merger.
In January, Bandhan Bank announced the acquisition of HDFC Ltd-owned Gruh Finance via a share swap ratio, primarily with an objective to lower the bank’s promoter holding and expand its housing finance portfolio. The share swap ratio for the amalgamation was fixed at 568 shares of Bandhan Bank for every 1,000 shares of Gruh Finance.
HDFC holds 57.83%, or 423.8 million shares, in Gruh Finance as the promoter, while Bandhan Financial holds around 82.28%, or 981.4 million shares, in Bandhan Bank.
Gruh Finance has total assets of ₹15,970.97 crore, a turnover of ₹1,687.19 crore and a net worth of ₹1,380.92 crore, as on 31 March 2018. The home finance company, primarily focused on the retail segment, recorded a net profit of ₹220 crore in the first half of the current financial year.
Bandhan Bank had total assets worth ₹44,310.06 crore, a turnover of ₹5,508.48 crore and a net worth of ₹9,382 crore as on 31 March 2018.