Shares of IDFC Ltd. hit record high on Tuesday after the board of IDFC First Bank Ltd. approved the merger of the former and IDFC Financial Holding Co. with the bank.
Shareholders will receive 155 IDFC First Bank shares for every 100 IDFC shares held, according to an exchanges filing. Due to the merger, the standalone book value per share of the bank would increase by 4.9%, as calculated on the March 31 financials.
Adding to this, at least 0.4% equity or 65.8 lakh shares of IDFC changed hands in three large trades, while IDFC First Bank had 20.3 lakh shares change hands in a large trade, according to Bloomberg data.
Shares of IDFC surged over 5% while those of IDFC First Bank declined nearly 6% intraday, as the merger stands in favour of the IDFC shareholders by over 16%, as per the last closing price of both companies.
Shares of IDFC advanced as much as 5.95% intraday, before trading at a 1.05% high as of 10:11 a.m. This compares to a 0.04% decline in the Nifty.
Total traded volume stood at 27.3 times its 30-day average. The relative strength index was at 70, implying that the stock may be overbought.
Shares of IDFC First Bank Ltd. fell 5% to Rs 77.85 apiece, compared to a 0.04% decline in the NSE Nifty 50 as of 10:11 a.m. The stock declined 5.98% intraday, the most in over six months since Dec. 23, 2022.
Total traded volume stood at five times its 30-day average. The relative strength index was at 56.6.
Out of the 15 analysts tracking the company, eight maintain a 'buy' rating, three recommend a 'hold' and four suggest to 'sell' the stock, as per Bloomberg data. The average calculated from the 12-month price target given by analysts implies a potential downside of 4.9%
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