Both the companies will benefit by the merger. IDFC Ltd shareholders more so, as they get to participate directly in the growth of live wire IDFCB. And they are getting a good premium which gives them an enhanced start.
VV can work more freely as he has to interact only with his own board. Although it must be said that during the last three years there was no evidence of any interference by the IDFC board in the working of the bank, which was a factor in the excellent performance so far.
With the merger out of the way, it appears that the bank would grow at a faster clip. On the TV screen VV looked relieved and promptly announced a raising of additional capital of 2000 crores by the end of current year, to underline his strong intent for growth. This is on top of 1500 crores raised last week and 600 crores being added along with the merger. This is a large amount of injection within one single year in an already well capitalised balance sheet.
HDFC Bank is also feeling euphoric with the disappearance of their promoter and have announced an intent of doubling every four years. It shows that the banking industry sees the Indian economy booming for many years. I also think that Indian economy has never been on such a sound footing in its entire history. And the boom has already begun sometime last year.
| Subscribe To Our Free Newsletter |
