'Semi-arranged match' may not fill all gaps for Bandhan Bank

The merger makes Bandhan susceptible to shocks in the housing market

Deepak Parekh, Chairman of HDFC, termed the merger between Bandhan Bank and Gruh Finance as a semi-arranged match. But this one too, as with any marriage, may take time to establish compatibility. Tuesday’s stock market reaction echoes similar sentiments. While Gruh Finance stock took a big beating – down 17 per cent to adjust to the merger swap ratio — Bandhan’s stock fell over 5 per cent.

While the merger with Gruh Finance expands Bandhan’s footprint beyond its core eastern and north-eastern markets, there are still concerns over the value accretion the deal can offer to investors.

Gruh’s loan book