State Bank of India (SBI) & its listed associate banks mainly State Bank of Travancore (SBT) and State Bank of Bikaner & Jaipur (SBBJ) have rallied by up to 9% on the BSE after SBI approved the share swap ratios for the merger of five associate banks and Bharatiya Mahila Bank with itself.
As per the approved merger ratios for each of the banks, the scheme provides for allotment of:
– 28 equity shares of Rs 1 each of SBI for every 10 equity shares of Rs 10 each of State Bank of Bikaner and Jaipur.
– 22 equity shares of Rs 1 each of SBI for every 10 equity shares of Rs 10 each of State Bank of Mysore.
– 22 equity shares of Rs 1 each of SBI for every 10 equity shares of Rs 10 each of State Bank of Travancore.
– 4,42,31,510 equity shares of Rs 1 each of SBI for every 100 crore equity shares of Rs 10 each of Bhartiya Mahila Bank.
- The merger will add to the strength of SBI — which, at assets of about Rs 23 lakh crore, is roughly one-fourth of the Indian banking system — with an additional capital base of about Rs 4 lakh crore.
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SBI CFO Anshula Kant told that eight valuation experts were appointed to arrive at the share swap and that May 16, the day the merger was first announced, was taken as the valuation cut-off date.
