Bharat Financial Inclusion, IndusInd Bank stocks trading lower on profit-booking

BT Online        Last Updated: September 12, 2017  | 12:47 IST
Bharat Financial Inclusion, IndusInd Bank stocks trading lower on profit-booking

IndusInd Bank and Bharat Financial Inclusion were trading lower in early trade today after closing higher 5.56 percent and 3.35 percent respectively in Monday's trade.

Analysts said the downward move was on account of profitbooking.

Also read: How IndusInd Bank-Bharat Financial Inclusion merger will be mutually beneficial

At 10:27 am, the IndusInd Bank stock was trading 1.73 percent or 31 points higher at 1759.75 level on the BSE.

The Bharat Financial Inclusion stock fell 0.77 percent or 7.40 points to 959 level.  

On Monday, both stocks were the major market movers  on news that IndusInd Bank and Bharat Financial have entered into exclusive talks for a potential strategic combination.

The two financial firms had long been speculated to be interested in a deal, with analysts saying previously it could come in the form of a share swap. IndusInd Bank is India's sixth-largest private sector lender by assets and has a market value of about $16 billion, while Bharat Financial Inclusion, formerly known as SKS Microfinance Ltd, is valued at more than $2 billion.

Bharat Financial has 1,408 branches and employs 15,284 people. With 6.8 million customers, it has a loan book of Rs 10,971 crore.

The announcement comes two months after another private lender IDFC Bank and Shriram Capital agreeing to examine the merger possibility with a view to creating one of the country's largest retail banks, which could be valued at over Rs 65,000 crore.

Bharat Financial Inclusion suffered a loss of Rs 37 crore for the quarter to June as against Rs 236 crore in the same period a year ago.

For 2016-17, the company had recorded a profit of Rs 290 crore. If the deal goes through, the merger will take place with a share swap as both are listed.

"The company has entered into an exclusivity agreement with IndusInd Bank for agreeing to have an exclusive discussion with IndusInd Bank about the proposed potential strategic combination by way of amalgamation through a scheme of arrangement, or any other suitable structure," BFIL said in a regulatory filing.

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