IndusInd Bank, Bharat Financial trading flat even as CCI okays merger
December 20, 2017:
Shares of IndusInd Bank and Bharat Financial Inclusion were trading flat even as the Competition Commission of India has approved the scheme of amalgamation between IndusInd Bank and Bharat Financial Inclusion.
According to a filing with the stock exchanges, CCI had yesterday considered the proposed combination and approved the same. The scheme remains subject to the receipt of approval from the RBI and regulatory approval, including approval of the stock exchanges, SEBI, the National Company Law Tribunal and respective shareholders.
In October, IndusInd Bank had announced the takeover of micro finance lender Bharat Financial Inclusion. Chairman of the bank, R. Seshasayee, had said the acquisition would help develop reach and would be a strong partnership. The two institutions had worked together for many years and were, therefore, comfortable with each other’s people and culture, he said.
IndusInd Bank had in October decided to acquire the country’s leading microfinance player Bharat Financial Inclusion Ltd (BFIL). The merger will be effected through an all-stock transaction of BFIL into IndusInd Bank through a Composite Scheme of Arrangement. Post merger, the new entity will have 4,000 branches and outlets and 16 million customers. The appointed date for the composite scheme is January 1, 2018.
BFIL, formerly SKS Microfinance, had a customer base of 68 lakh and loan portfolio of Rs 7,709 crore as of June 30. However, the microfinance company suffered a loss of Rs 37 crore for the quarter to June against Rs 236 crore in the same period a year ago. For 2016-17, the company had recorded a profit of Rs 290 crore.
(This article was published on December 20, 2017)
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