Shares of IDFC Bank Ltd. rallied nearly 9 percent today on acquisition of a Tamil Nadu-based microfinance company.
The bank signed a share purchase agreement with Grama Vidiyal Microfinance Ltd to acquire 100 percent stake in the microfinance company, in an all-cash deal, according to a Bombay Stock Exchange (BSE) filing.
Gramin Vidiyal will become a wholly-owned subsidiary of the bank, following the acquisition.
The move enables IDFC Bank to significantly enhance its network and reach and make basic banking services available to a large customer base.IDFC Bank Statement in its BSE filing
The acquisition will give the bank access to 12 lakh rural and semi-urban households and network of 319 locations across 65 districts of Tamil Nadu, Kerala, Karnataka, Pondicherry, Maharashtra, Gujarat and Madhya Pradesh.
Gramin Vidiyal has an asset under management of Rs 1,502 crore of micro finance assets as of March 2016.
Following the announcement, shares of IDFC Bank rose 8.94 percent to Rs 52.4 as of 3:00 pm on the BSE.
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