Shares of Bank of Baroda climbed over 3 per cent on Thursday after the public sector lender announced the swap ratio for the proposed merger of Vijaya Bank and Dena Bank. The investors also cheered the bank's plan to raise fund up to Rs 1,285 crore by issuing Basel III compliant bonds.
Following the announcement, shares of Bank of Baroda gained as much as 3.30 per cent to touch an intra-day high of Rs 123.35 apiece, after opening higher at Rs 121.80 compared to the previous close of 119.40 on the BSE. Holding early gains, shares were currently trading at Rs 120.90 apiece, up 1.26 per cent.On the National Stock Exchange, stocks of the bank were trading at Rs 120.90, up 1.30 per cent.
Bucking the trend, shares of Dena Bank plunged as much as 20 per cent to Rs 14.40 on the BSE amid spurt in volume trade. According to data available with exchange, as much as 21.31 lakh shares have changed hand over the counter as compared to two-week average of 2.94 lakh shares.
In a similar trend, Vijaya Bank shares tumbled 7.4 per cent in intra-day trade as investors gave thumbs down to share-swap ratio on its merger with Bank of Baroda.
The Union Cabinet on Wednesday gave its approval for the proposed merger of Vijaya Bank and Dena Bank with Bank of Baroda.
As per the scheme of amalgamation, shareholders of Vijaya Bank will get 402 equity shares of Rs 2 each of Bank of Baroda for every 1,000 shares held of Rs 10 each.
Similarly, Dena Bank's shareholders will get 110 shares of Rs 2 each of Bank of Baroda for every 1,000 shares held of Rs 10 each.
In September last year, the government had announced the merger of Vijaya Bank and Dena Bank with Bank of Baroda to create the third-largest bank after State Bank of India and HDFC Bank. The government expects the new entity will be operational from the beginning of the next financial year.
Meanwhile, the benchmark index BSE Sensex was trading lower by 242.29 points, or 0.68 per cent, at 35,649.23.
Eidted by Chitranjan Kumar