Shares of IDFC Limited and IDFC First Bank (NASDAQ:FRBA) experienced a surge on the National Stock Exchange (NSE) on Wednesday, following the Competition Commission of India's (CCI) approval of their proposed merger. The approval signifies a significant step towards the completion of the merger, which was decided in a board meeting held on July 3, 2023.
The merger still awaits consent from other regulatory authorities and shareholders to proceed. As part of the merger agreement, the share-exchange ratio is set at 155 equity shares of IDFC First Bank for every 100 equity shares of IDFC Limited. Each share has a face value of ₹10 (USD1 = INR83.252).
V Vaidyanathan, Managing Director and CEO, envisions this merger as an opportunity to create a financial services powerhouse. He also anticipates an improvement in operational efficiency as a result of the consolidation.
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