AU and Fincare Small Finance Bank merged, know what will happen to the shareholders now?
New Delhi: Two well-known small finance banks of the country have merged. These are AU Small Finance Bank (AU SFB) and Fincare Small Finance Bank (Fincare SFB). The boards of directors of both the banks have approved the all-stock merger (AU-Fincare Merger) on October 29. Under Section 44A of the Banking Regulation Act, 1949, the merger plan will require approval from the shareholders of both the banks, RBI and the Competition Commission of India. Upon receipt of necessary approvals, Fincare SFB will be merged into AU SFB. Shareholders of Fincare SFB will receive shares of AU SFB in exchange for their shares in Fincare SFB at the approved share swap ratio. All employees of Fincare SFB will become part of the AU SFB family.
Investment of Rs 700 crore in Fincare SFB
As per the terms of the merger, Fincare Business Services Limited (FBSL), the promoter of Fincare SSB, will invest Rs 700 crore in Fincare SFB before the completion of the merger. The share exchange ratio has been recommended by Bansi S Mehta Valuers LLP and RBSA Valuation Advisors LLP, independent valuers appointed by AU SFB and Fincare SFB. This has been accepted by the concerned board. JM Financial Ltd. provided fairness opinion to AU SFB on share exchange ratio and IIFL Securities Ltd. provided fairness opinion to Fincare SFB.
579 shares of AU on 2000 shares of Fincare
Fincare SFB shareholders will receive 579 shares in AU SFB for every 2,000 shares of Fincare SFB. After the merger, existing shareholders of Fincare SFB will hold 9.9% stake in AU SFB. Rajeev Yadav, MD and CEO of Fincare SFB, will be appointed Deputy CEO of AU SFB after the merger. He will report to Sanjay Agarwal, MD & CEO, AU SFB. Yadav will continue to lead the Fincare unit of AU SFB, which will house the majority of Fincare SFB’s businesses.
Stock Decline
There was a decline in the shares of AU Small Finance Bank (AU SFB Share) on Monday. The bank’s shares were seen trading at Rs 661, down 4.23 per cent or Rs 28. The 52 week high of this stock is Rs 794.95 and 52 week low is Rs 548.15.
