IDFC, Shriram Group stocks end lower on proposed merger

Shares of IDFC and Shriram Group of companies ended up to 5.7 per cent lower today after they agreed to merge and create the largest retail-focused bank in the country.
The scrip of IDFC tumbled 5.68 per cent to close at Rs 56.50 on BSE. During the day, it lost 6 per cent to Rs 56.25.
Shares of IDFC Bank, however, rose by 0.69 per cent to Rs 65.20 after earlier falling 3.32 per cent to Rs 62.60.
The scrip of Shriram City Union Finance tanked 5.56 per cent to close at Rs 2,349.20. Intra-day, it declined by 7 per cent to Rs 2,312.80.

Shares of Shriram Transport Finance also fell by 3.33 per cent to end at Rs 1,054.35 after earlier plunge of 7.39 per cent to Rs 1,010.
IDFC, which entered into banking late 2015, and the Piramal Group-backed financial services major Shriram Group on Saturday agreed to merge.

"The boards of Shriram Group and IDFC have entered into an exclusivity arrangement for 90 days to jointly explore an opportunity for a merger. No transaction has been approved by the boards.
"Now, diligence will take place, we will discuss on the valuations and the respective boards will then meet and then a proposal will be made. If more time is needed then will extend the exclusivity period by another 60 or even 90 days," Ajay Piramal said.

Currently, Shriram Group has a loan book of over Rs 80,000 crore, while IDFC and its banking arm together have loan book of over Rs 60,000 crore. The total assets of the merged entity will cross Rs 9 trillion.
IDFC owns 52.86 per cent in IDFC Bank, which is the seventh-largest private lender in the country now. Piramal owns 20 per cent in Shriram Capital and 10 per cent each in both Shriram Transport and Shriram City Union.