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)