IDFC and Shriram Group extend merger agreement till November 8

The boards of IDFC and Shriram Group have on Thursday agreed to extend the agreement for their merger till November 8, 2017. The agreement named CES (Confidentiality, Exclusivity and Standstill) was extended due to the extensive due diligence process involved and the ongoing discussions between the parties.

IDFC and Shriram Group had entered into a 90-day agreement for evaluation of their merger on July 8, 2017. In the said proposal, Shriram City Union Bank was to merge with IDFC Bank. With this, Shriram Transport Finance would be the non-banking finance subsidiary of IDFC and, thereby, all the operating businesses of both the groups would be managed by IDFC. However, any formal structure has not been finalised as yet.

The shareholders of the Shriram group were upset with the fact that post this merger, the transport finance company would get delisted. Hence, in the ongoing discussions, both groups are focusing on protecting interests of their respective shareholders.

Last year in September, IDFC’s stock was trading at 52-week high of Rs 81.20. However, in this one year, the stock has corrected a lot and currently it is trading in the range of Rs 55-60. In August, it had traded as low as Rs 53.25.  Shriram Transport Finance’s stock has been trading in a consolidation mode over the last six months.