IDFC Bank-Capital First merger talks rife

Despite the neutral stance of Mumbai-based NBFC Capital First and private sector lender IDFC Bank, the market is rife with widely discussing the possibility that the two companies are in the final stage of merger talks.

The merger is likely to provide Capital First a window to enter the banking sector and provide a retail franchise to IDFC Bank. The merger would create a financial company with a market value of about Rs. 29,080.57 crore, including all business segments of the companies.

IDFC Bank had posted a slump of 40 per cent in its net profit at Rs. 234 crore in the second quarter of fiscal year 2018 on a year-on-year basis. On the contrary, Capital First had posted an increase of over 51 per cent in its net profit at Rs. 70.9 crore in the same quarter of the fiscal year 2018 on a year-on-year basis.

Following a steep rally on the bourses over the past few days, both the companies traded mostly in the negative territory on Friday. While Capital First ended at Rs. 840.05 per share, up by 0.54 per cent; IDFC Bank ended at Rs. 67.65 per share, lower by 1.31 per cent on BSE on Friday.

However, both the stocks also touched their 52-week highs during the trade session. IDFC Bank hit its 52-week high of Rs. 70.35 per share and Capital First touched its 52-week high of Rs. 852.85 per share on BSE on Friday.