Banking shares on a roll; Bank Nifty zooms over 450 points

Kotak Mahindra Bank, South Indian Bank, Karnataka Bank, Dhanlaxmi Bank, ICICI Bank, SBI & Yes Bank are up 3-6% on NSE.

Banking shares public as well as private sectors are in demand and trading higher by up to 6% on the National Stock Exchange (NSE) after the Kotak Mahindra Bank announced that it was acquiring ING Vysya Bank in an all-stock deal.

Kotak Mahindra Bank, South Indian Bank, Karnataka Bank, Dhanlaxmi Bank, Lakshmi Vilas Bank and City Union Bank, Yes Bank, Axis Bank, ICICI Bank and ING Vysya Bank among the private sector banks are up 3-6%, while State Bank of India (SBI), Oriental Bank of Commerce, Bank of Baroda, Andhra Bank and Bank of India are up 2-4% on NSE.

Bank Nifty, the NSE banking share index, has surged 2.56% or 452 points at 18,097 at 1133 hours against 0.91% rise in the benchmark CNX Nifty. The banking index touched a record high of 18,097 in intra-day deal.

Kotak Mahindra Bank announced that its board has approved the amalgamation of ING Vysya Bank with Kotak Mahindra Bank at a swap ratio of 725 equity shares of Rs 5 each of Kotak Mahindra Bank for every 1000 equity shares of Rs 10 each held in ING Vysya Bank, subject to the necessary regulatory and shareholder approvals.

This exchange ratio indicates an implied price of Rs 790 for each ING Vysya share based on the average closing price of Kotak shares during one month to November 19, 2014, which is a 16% premium to a like measure of ING Vysya market price, banks said in a regulatory filing.