IDFC First Bank Shares Dip 5% Post Merger Announcement

Board of directors of IDFC First Bank have already approved merger of IDFC Ltd and IDFC Financial Holding Company with itself via a scheme of amalgamation on July 3, 2023. Soon after this development, IDFC First Bank shares witnessed a decline of 5.31% on BSE today (July 4, 2023).

The scheduled merger will mark yet another key deal in the Indian banking sector days after the amalgamation of the HDFC Bank and Housing Development Finance Corporation.

IDFC First Bank Ltd Stock Performance Today and In last 1-Week: Current market price of IDFC First Bank share is Rs 77.59 apiece with intraday fall of 5.31%. IDFC First Bank stock declined 0.79% in last 1-week and over 6% in last 2-weeks.

Today, IDFC First Bank shares opened at Rs 81.94 apiece, touched the day's high of Rs 81.94 per share and day's low of Rs 77.10 apiece, respectively.

IDFC Limited Stock Performance Today And In Last Few Months: IDFC First Bank shares are down over 5% while IDFC shares gained 2.11% on BSE, as the merger ratio favours the latter. Current market price of IDFC Limited share is Rs 111.40 per share on BSE. IDFC Limited shares gave return of 109% In last 1-year and gained 9.50% in last 1-week only. In last 3-years, IDFC Limited shares gained 485%.

According to the BSE filing of IDFC First Bank regarding the merger with IDFC Ltd, "The Board of Directors of the Bank has accorded approval for the execution of an implementation agreement between IDFC Limited and IDFC FIRST Bank ("Implementation Agreement"), which, inter alia sets out the manner of implementing the Proposed Transaction contemplated under the Scheme, the representations and warranties being given by each party and the rights and obligations of the respective parties in relation to the Proposed Transaction."

Under the proposed merger, the Share Exchange Ratio for the amalgamation of IDFC Limited into and with IDFC FIRST Bank shall be 155 equity shares (credited as fully paid-up) of face value of Rs 10/- each of IDFC FIRST Bank for every 100 fully paidup equity shares of face value of Rs 10/- each of IDFC Limited.

According to IDFC First Bank's BSE filing, "The Bank maintains highest levels of corporate governance. Thus, IDFC FIRST Bank is well placed to consistently grow in a profitable manner. All the shareholders and stakeholders of the IDFC FHCL, IDFC Limited and IDFC FIRST Bank shall benefit from such growth at the Bank, leading to opportunity for value creation in the long run and for maximizing the value and returns to the shareholders."

The Scheme is subject to the receipt of requisite approvals from the Reserve Bank of India ("RBI"), Securities and Exchange Board of India ("SEBI"), the Competition Commission of India, the National Company Law Tribunal, BSE Limited and the National Stock Exchange of India Limited (collectively, the "Stock Exchanges") and other statutory and regulatory authorities, and the respective shareholders, under applicable laws.