“We propose to complete aforesaid Amalgamation during the financial year barring unforeseen circumstances,” IDFC informed the exchanges.
Towards this step, the board of IDFC and IDFC Financial Holding, at their respective meetings on March 18, approved the appointment of Chartered Accountant SSPA & Co. as a registered valuer for recommendation of fair share exchange ratio.
The companies also approved the appointment of Axis Capital for issuance of fairness opinion on the share exchange ratio, and appointment of law firm Cyril Amarchand Mangaldas for conducting legal due diligence, drafting and finalising scheme of amalgamation and filing regulatory applications.
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The merger will give IDFC First bank access to nearly ₹4,000 crore of capital, a bulk of which is likely to come from the sale of IDFC’s mutual fund business to Bandhan Bank. Shareholders of both companies are also seen benefitting from the recent clean-up of the bank’s balance sheet and push towards retail loan growth.
The merger has been slightly delayed due to considerations regarding fair value for the two companies. IDFC was seeking higher returns for shareholders whereas the bank was looking at fair value consideration as per its future growth and earnings potential.