agree. the valuation problem existed before the cash was invested in IDFC first bank and special dividend. now IDFC exists more or less like a pass through ownership of the bank shares.
put it another way, what is IDFC bank getting for the merger ? a few 100 crs at best. so they can issue a small bit shares for that. outside of that, its a non event for the bank. they just change the ownership of the shares from IDFC to shareholders of IDFC and transfer those shares.
So the merger ratio would how many shares of IDFC first bank we hold per share of IDFC ltd
So discount basically should close as the probability of the merger increases.
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