The swap ratio has been set at 139:10 (for 10 equity shares Of Capital First, 139 Shares of IDFC Bank will be allotted).
IDFC Bank and its parent IDFC Ltd past year announced talks to acquire some of Shriram Group's financial services businesses but the deal fell through due to disagreement on a share swap ratio.
IDFC Bank-Capital First merger will form a combined entity with an AUM of Rs, 88,000 crore and 5 million customers supported by 194 branches, 353 business centres and over 9,100 micro ATM points. "It will bring two tech savvy, culturally aligned platforms to come together to create a diversified and fast growing universal bank with a national footprint, in a manner that will be value accretive for all shareholders", IDFC Bank Managing Director and CEO Rajiv Lall said in a statement.
V Vaidyanathan, who is now chairman and MD of Capital First, will succeed Lall as MD and CEO of the combined entity upon completion of the merger and necessary regulatory approvals. Post-merger, IDFC Bank will gain diversity in its customer base, while Capital First will convert to a universal bank. He will replace Veena Mankar, who will remain on the board. Warburg Pincus owns 36 stakes in Capital First.
Capital First, which also counts Singapore state investor GIC among its major investors, will bring in a loan book of nearly 230 billion rupees as of September 30, three million customers and a distribution network spanning 228 locations across the country. The deal is conditional on central bank and other regulatory approvals.