Allahabad Bank shareholders to lose 25% post-merger with Indian Bank

The city headquartered Allahabad Bank shareholders would find nearly 25 per cent erosion in holding value, based on current stock price post amalgamation with the Indian Bank slated to be effective from April 1. Allahabad Bank's name and its board will cease to exist from April 1. It has over 3,000 branches across the country. A shareholder with 1,000 shares of Allahabad Bank will get 115 shares of Indian Bank.

Based on the closing price of Thursday, holding stock value of Rs 7,600 will become Rs 5,681 for an Allahabad Bank shareholder, down by 25 per cent.

Indian Bank closed at Rs 49.40 a share while Allahabad Bank share closed at Rs 7.6 at BSE. "Valuations had been done transparently by independent agencies like Deloitte and KPMG for both the banks. Swap ratio was finalised after considering grievance redressal committee for shareholders," Indian Bank Managing Director & CEO Padmaja Chunduru said when asked. An expert committee was constituted to consider the objections of some minority shareholders on the share exchange ratio.

Chunduru said she does not foresee any hurdle in amalgamation and it will happen as per schedule. "The amalgamated Indian Bank will be operational from April 1 and the combined branches would be about 6,000 without much overlap of branches. The amalgamated bank headquarters will be in Chennai," Chunduru said.