Indian Bank, Allahabad Bank decline after consolidation

The merged entity will be 7th largest PSU bank in India

In a press briefing after market hours on Friday, 30 August 2019, Finance Minister Nirmala Sitharaman announced that Indian Bank and Allahabad Bank will be merged. The entity will be seventh largest public sector bank with business of Rs 8.08 lakh crore.

The entity will have nationwide presence with strong networks in the South, North and East.

The scale and synergy will benefit through doubling of business size. Major scaling up of reach due to complementary networks. High CASA and lending capacity in consolidated bank.

Both the banks share a common CBS (core banking software), BaNCS, which will enable quick realisation of gains.

The finance minister has announced the upfront capital infusions of Rs 55250 crore into 10 public sector banks. As per the proposal, Indian Bank is being allocated Rs 2500 crore.

Shares of Indian Bank slumped 6.84% to Rs 186.50 at 11:42 IST on BSE. The stock hit a high of Rs 194.8 and a low of Rs 186.05 so far during the day. The stock hit a 52-week high of Rs 339 on 03 Sep 2018. The stock hit a 52-week low of Rs 160.2 on 05 Aug 2019.

On the BSE, 1.14 lakh shares were traded in the counter so far compared with average daily volumes of 96626 shares in the past one quarter. Indian Bank has underperformed the market in past one year, sliding 41.55% as against Sensex's 4.27% fall.

Shares of Allahabad Bank declined 2.55% to Rs 34.40 at 11:42 IST on BSE. The stock hit a high of Rs 35.1 and a low of Rs 34.3 so far during the day. The stock hit a 52-week high of Rs 58.8 on 11 Mar 2019. The stock hit a 52-week low of Rs 30 on 23 Aug 2019.

On the BSE, 56587 shares were traded in the counter so far compared with average daily volumes of 29 lakh shares in the past one quarter. Allahabad Bank has underperformed the market in past one year, declining 16.23% as against Sensex's 4.27% fall.

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