The board of Axis Bank has approved the merger of the financial services business of Enam Securities Private Ltd (Enam) with itself by transferring the business into the bank's wholly owned subsidiary.
In a notice issued to the BSE on Friday, Axis Bank said, it will merge Enam Financial Services through a share swap, in the ratio of 5.7 equity shares of Axis Bank for every one equity Enam share, as was announced earlier.
After the completion of the share swap transaction, Axis Bank will sell Enam Financial Services to Axis Securities and Sales Ltd (ASSL), a wholly owned subsidiary of the bank, for approximately Rs 274 crore, which represents the book value of the Enam Financial Services.
The revised merger scheme was formulated in compliance with the conditions prescribed by the Reserve Bank of India, the bank said.
According to an Axis Bank spokesperson, the deal continues to be a share swap transaction. As Enam Financial Services will be merged with ASSL, the bank will sell the business to ASSL at its book value.
As the subsidiary is a running business, it has its own resources to pay for the deal, he added. In November 2010, Axis Bank had agreed to acquire a major chunk of Enam Securities through a share swap deal.