IDFC First Bank shares fall 4%; IDFC climbs nearly 2% post merger announcement

New Delhi: Shares of IDFC First Bank fell 4 per cent on Tuesday after the company announced the merger of its parent IDFC Ltd with itself in an all-stock transaction.

The stock of IDFC First Bank declined 4.02 per cent to settle at Rs 78.65 on the BSE. During the day, it fell 5.90 per cent to Rs 77.10.

However, shares of IDFC climbed 1.92 per cent to end at Rs 111.20. In intra-day, shares of the company gained 6 per cent to hit its 52-week high of Rs 115.70.

IDFC First Bank on Monday announced the merger of IDFC Ltd with itself in an all-stock transaction, marking another major deal in the Indian banking space days after the amalgamation of the HDFC twins.

The boards of IDFC First Bank and IDFC have approved the reverse merger.

While the bank did not provide the likely valuation of the merged entity, based on Monday's closing prices of the two companies on BSE, the valuation is Rs 71,767 crore.

Under the proposed reverse merger scheme, an IDFC shareholder will get 155 shares for every 100 shares she/he holds in the bank. Both stocks have a face value of Rs 10 each, IDFC First Bank said in a statement.

IDFC Chairman Anil Singhvi said the merger is the last phase of IDFC's corporate restructuring and will help create a financial services provider that offers seamless delivery of services to customers. It will augment operational efficiency for the merged entity and create synergies for our shareholders.