Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: ACCOUNTING STANDARD :: cpt :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: ACCOUNTING STANDARDS :: VAT RATES :: form 3cd :: articles on VAT and GST in India :: list of goods taxed at 4% :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit
« Mergers and Acquisitions »
 Salil Parekh, a turnaround manager with expertise in mergers & acquisitions
 Samsung to chase big mergers and acquisitions deals on three fronts, says strategy chief
 Indian Steel Tycoon Hires StanChart Banker to Lead M&A
 Deals of the day-Mergers and acquisitions Nov 14, 2017
 Largest cybersecurity M&A deals in 2017
 State Bank of India eyes profitable expansion outside home
 Deals of the day-Mergers and acquisitions Nov 6, 2017
 Large merger and acquisitions back in Indian pharma
 RBI norms may spur digital wallet mergers
 How Indian businesses are evolving M&A strategies
 Deals of the day-Mergers and acquisitions Nov 3, 2017

Bank of Rajasthan to merge with ICICI Bank
May, 20th 2010

ICICI Bank sets swap ratio at 25:118.

Bank of Rajasthan is to be merged with ICICI Bank. The boards of both banks, which met separately on Tuesday evening, granted in-principle approval for the merger.

In a statement, ICICI Bank said it has entered into an agreement with certain shareholders' of the BoR for amalgamation of the bank with itself with a share swap ratio of 25:118 (25 shares of ICICI for 118 shares of BoR).

Swap Ratio

The bank said the swap ratio is based on an internal analysis of the strategic value of the amalgamation, average market capitalisation per branch of old private sector banks and relevant precedent transactions. The board of BoR is scheduled to meet on May 23.

According to analysts, the swap ratio works out to a premium of 89.4 per cent over BoR's current market price. The merger is not likely to have any material impact on ICICI Bank's capital and the only advantage is a readymade branch network. With a Tier-I capital of above 13 per cent, the impact on ICICI Bank's capital would be less than 3 per cent.

Post-merger, ICICI Bank's branch network would go up to 2,463.This is the third merger for the bank, after it took over Bank of Madura and Sangli Bank.

Tayal Group's Stake

ICICI has negotiated the deal with the dominant shareholder group the Tayal family which holds a declared stake of 28.6 per cent. However, according to the SEBI ex-parte interim order on March 8, 2010, the Tayal group and related entities hold 55.01 per cent stake.

The Tayal group's stake in the bank came under the scrutiny by the Reserve Bank of India and SEBI.

In February, the RBI had levied a penalty of Rs 25 lakh on the BoR for violation of directions on acquisition of immovable property; deletion of records in the bank's IT systems; non-adherence to KYC (know-your-customer) and anti-monetary laundering guidelines, and irregularities in the conduct of accounts of a corporate group.

In March, SEBI had restrained the Tayal group entities from accessing the capital market or from dealing in securities. According to the SEBI order, an incorrect disclosure was made by BoR regarding the shareholding pattern of the promoter group.

The RBI had appointed Mr G. Padmanabhan, a former Chief General Manager of State Bank of India, as BoR's Managing Director and Chief Executive Officer, following the irregularities in the operations of BoR. The RBI had also appointed Deloitte Haskins and Sells as a special auditor to inspect the accounts.

Mr Vaibhav Agarwal, Vice-President, Banking Research, Angel Broking, said the only advantage for ICICI Bank is the 460-strong branch network of BoR. It is a small private bank which has presence in the northern and western regions of the country. That is a niche area as other private sector banks are mainly present in the South,'' Mr Agarwal said.

The negatives for ICICI Bank are the potential risks arising from BoR's non-performing loans and that BoR is trading at expensive valuations. As on FY-10 the net worth of BoR was approximately Rs 760 crore and that of ICICI Bank Rs 5,17,000 crore, he added. For the December 2009 quarter, BoR reported a loss of Rs 44 crore on an income of Rs 373 crore.

Share movement

Shares of BoR jumped close to 20 per cent on Tuesday to a 52-week high on the back of reports of the merger. The shares were locked in at the upper circuit at Rs 99.5 at around 2 p.m. Close to three crore shares of BoR were traded on BSE and NSE , making for a total turnover of Rs 27,431 lakh. ICICI Bank was down more than one per cent on both the exchanges. On the BSE, the scrip was down 1.45 per cent at Rs 889.35. The ICICI Bank ADR was trading at $38.61 down $0.86 or 2.18 per cent on the NYSE.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Careers

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions