Broking and custodial services outfit Stock Holding Corporation of India Ltd (SHCIL) is to merge with IDBI Bank, giving 227 offices and access to 800,000 high net worth customers to the latter. It will be a non-cash share swap deal.
The swap ratio is yet to be fixed and the merger is subject to approval from the high court here, beside regulatory agencies and shareholders. The board of IDBI gave its in-principle nod for the merger proposal at a meeting yesterday, the bank said.
The entire merger process was expected to be completed by March 31, 2013.
The Mumbai-based public sector lender will absorb 1,300 employees of SHCIL on its rolls after the merger is complete. The assets and liabilities of SHCIL will move to IDBI after merger. B K Batra, deputy managing director, IDBI, said the bank had an option to convert offices of SHCIL into branches, helping to reduce the time to scale up operations and also save on costs.
At present, IDBI has about 1,000 branches. The broking subsidiary of SHCIL will be integrated with IDBI’s capital broking units.
SHCIL set up in 1986, promoted by IDBI and six other public financial and investment institutions. Besides custodial services to mutual funds and foreign institutional investors, it provides depository services to retail investors. It also has e-stamping facilities. Document management and insurance repository services are provided by subsidiary SHCIL Projects Ltd.