RBI has allowed reverse merger of small finance banks after the lock-in period. Under this decision, after Equitas Holdings and Ujjivan Finance, IDFC Group is thinking of reverse merger of its bank IDFC First Bank.
IDFC First Bank will have a reverse merger with the parent company.
After the lock-in period of five years is over, the Reserve Bank of India has allowed IDFC to step down from the promoter of its group IDFC First Bank. After getting permission from the central bank, it is believed that IDFC First Bank will be merged with IDFC. IDFC shares gained 11 percent on Thursday.
Today both the shares are trading in red mark. In such a situation, the big question arises that as investors, what should the shareholders of IDFC and IDFC First Bank do. At 11.25 in the morning, the share of IDFC was trading at Rs 57.70, down 2.20 per cent, while the share of IDFC First Bank was trading at Rs 50.65, down 2.97 per cent.
Key Level for IDFC
In a report published in Money Control, Shrikant Chauhan, Vice President, Kotak Securities, said regarding IDFC share that on July 22, this stock had gained up to 19 percent during trading, but it could not stand above 60 when the market closed and 59 Closed at the level of Rs. Currently this stock is looking directionless. In such a situation, if this stock gives a break out at the level of Rs 60-61, then it will continue to rise further and the next stop will be at the level of Rs 65. If the pressure on the stock increases and it comes below Rs 57.50, then due to the increase in pressure, it can fall to the level of Rs 55.50.
Small Finance Bank gets permission for reverse merger
Earlier, the Reserve Bank of India had allowed the merger of the small finance bank with its promoter, though it required the end of the lock-in period of 5 years. Under the same order of RBI, Equitas Holding and Ujjivan Financial had said that it would merge Equitas Small Finance Bank and Ujjivan Small Finance Bank into itself.
Bank established in 2015
Talking about the IDFC Group and the group entities, IDFC holds 100% stake in IDFC Financial Holdings. IDFC Financial Company holds 100 per cent stake in IDFC Asset Management and 36.6 per cent in IDFC First Bank. IDFC Bank was established in 2015 by de-merging the infrastructure lending business of IDFC. The company is again looking to move forward towards reverse merger.
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