The Economic Times, in an article on Wednesday, said that the IDFC merger with its IDFC First Bank will likely take longer than expected "as the management on both ends is looking to extract value for their respective shareholders". The reports claimed two sources that were familiar to the process. In response to this IDFC issued a clarification in an exchange filing saying that the reports are baseless, false and misleading. The company also added that the reports were from 'unidentified sources'.
In the statement, the company said, "These are all media speculations and do not serve the purpose of corporate governance for listed companies."
IDFC has said that the company is committed to their ongoing restructuring plans that will enhance shareholders value. They have also said that there is nothing that requires disclosure and they will not be commenting on any market speculations.
What did the report say?
According to the report by the newspaper, IDFC is asking for higher returns for its existing shareholders, while the private lender wants a fair value keeping in mind the future returns and growth potential. They also added that IDFC and IDFC First Bank had not responded to their queries.
The merger enables the bank to access nearly Rs 4,000 crore of capital, majority of which will come from the selling of IDFC Limited mutual funds business to Bandhan Bank. This will benefit the shareholders, after they lost out during the demerger of the bank.
IDFC Shares
The parent company IDFC owns more than 36 per cent of stakes in IDFC First bank. The shares of IDFC First Bank have gone up by 15 per cent since the beginning of this year while IDFC shares have gone up by 25 per cent.
At the time of writing this article the shares were at Rs 79.40.
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