IDFC Bank-Shriram Group merger likely to be finalised soon

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Mumbai | Updated: October 27, 2017 3:22:21 AM

The proposed merger between IDFC and Shriram Group, announced earlier this year and for which an extension had been sought, is likely to be finalised soon.

IDFC Bank, Shriram Group, Rajiv Lall, Shriram City Union, Shriram Transport Finance , financier of two-wheelersThe life and general insurance businesses of the Shriram Group are also supposed to become subsidiaries of IDFC, which would hold 75% stake in them. (IE)

The proposed merger between IDFC and Shriram Group, announced earlier this year and for which an extension had been sought, is likely to be finalised soon. “We will come out with a concrete announcement before November 8,” IDFC Bank founder MD and CEO Rajiv Lall told analysts on Thursday during the second-quarter post-earning conference call. IDFC and Shriram Group had entered into an exclusivity agreement for three months on July 8 to explore a merger that would help build a mass retail franchise with a universal bank at its core offering customers a wide range of products. Earlier this month, IDFC extended the agreement to November 8. “Given the extensive due diligence process involved and the ongoing discussions, the parties have agreed for extension of the confidentiality, exclusivity and standstill agreement up to November 8,” IDFC had said in a notification to the stock exchanges.

As per the contours of the merger shared by the two companies in July, Shriram City Union, a financier of two-wheelers, is slated to be merged into IDFC Bank, while Shriram Transport Finance is supposed to remain as a listed subsidiary of IDFC. The life and general insurance businesses of the Shriram Group are also supposed to become subsidiaries of IDFC, which would hold 75% stake in them. The Shriram Group’s companies lend to small entrepreneurs, selling them loans to buy second-hand trucks and also individuals to whom it gives two-wheeler loans.

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