Bandhan Bank soars 20% on reports of inclusion in MSCI Index

Shares of Bandhan Bank zoomed 20 per cent to trade at Rs 608.3 per share on the BSE on Friday on reports that the private lender would be included in the MSCI Global Standard index with effect from October 16.
In a tweet, analysts at Motilal Oswal Financial Services said that the inclusion was a result of merger with HDFC-owned Gruh Finance.
Motilal Oswal Financial Services Ltd
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@MotilalOswalLtd
Bandhan Bank is getting added MSCI index effective 16th October on effect of Gruh Finance getting merged with Bandhan Bank. #MOMarketUpdates
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9:29 AM - Oct 11, 2019
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Last week, Kolkata and Ahmedabad benches of National Company Law Tribunal (NCLT) approved the merger of Gruh Finance and Bandhan Bank.
"Consequently, October 17th has been fixed as 'record date' for the purpose of determining the shareholders of GRUH who shall be entitled to receive the equity shares of the Bank, and also for determining portfolio of the Non-Convertible Debenture holders of GRUH which shall be shifted to the new International Securities Identification Numbers (ISINs) created by the Bank, pursuant to the effectiveness of the merger," Bandhan Bank said in a regulatory filing.
Bandhan Bank's merger with Gruh Finance will help the Kolkata-based private lender diversify its loan portfolio of Rs 45,400 crore, which is heavily skewed towards micro loans with 85 per cent share.
The stock of the private lender, however, pared gains later, and was trading 9 per cent higher at Rs 553.05 apiece at 11:50 am. In comparison, the benchmark S&P BSE Sensex was trading 0.12 per cent higher at 37,926 level. A total of 7.3 million shares have changed hands on the NSE and BSE so far.
Gruh Finance, too, touched an intra-day high of Rs 327.3 per share, up 20 per cent, but trimmed gains later to trade 8 per cent higher at Rs 293.95.

Bandhan Bank to buy mortgage provider Gruh Finance in share-swap deal

Bandhan Bank Ltd will buy mortgage provider Gruh Finance Ltd in a share-swap deal to build up its housing loan portfolio, the companies said on Monday.
Under the merger cooperation agreement, shareholders of Gruh Finance will get 568 shares of Bandhan Bank for every 1,000 shares held.

The amalgamation will result in enhancement of shareholders' value accruing from synergy of operations, new products development, integration of technology and information, both the companies said in regulatory filings to stock exchanges.
It will help in pooling of resources, creating better synergies, optimal utilisation of resources and greater economies of scale, the filings said.
Bhandhan Bank has a market capitalisation of Rs 59,800 crore, while Gruh Finance is worth Rs 23,224 crore.
Shares of Bandhan Bank closed down 5.8 percent at Rs 498.05 on Monday, on media reports of a deal, which was announced after the market close. Gruh Finance shares ended 4.1 percent lower at Rs 306.35.
The Reserve Bank of India has tightened its grip on the banking sector amid fears that problems at two large non-banking financial companies could signal a wider credit crunch.
(With inputs from PTI and Reuters)