January 8, 2019 / 4:30 AM / 13 days ago

BUZZ-India's Bandhan Bank, Gruh Finance drop after merger plans

** Shares of Bandhan Bank Ltd fall as much as 5.4 pct to 471 rupees, their lowest since Dec 12, 2018

** Gruh Finance Ltd tanks as much as 14.7 pct to 261.3 rupees, marks its biggest daily pct loss since Sept 21, 2018

** Bandhan Bank on Monday said it will buy mortgage provider Gruh Finance in a share-swap deal to build its housing loan portfolio

** The bank has been under pressure from the Reserve Bank of India to reduce promoter shareholding and Citi analysts believe that merger will result in a dilution in Bandhan’s promoter shareholding to 61 pct from 82 pct although the regulatory target of 40 pct has not been met as yet

** Bandhan Bank’s offer values Gruh Finance at an 8 pct discount to its current market value (as per management press commentary), according to Morgan Stanley

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