Kotak Mahindra Bank fell 1.22% and ING Vysya Bank slipped 1.81% at 14:41 IST on BSE on reports that the market regulator is probing whether there was any insider trading ahead of announcement of merger deal between the two private sector banks.
Kotak Mahindra Bank fell 1.2% to Rs 1,185.25. The stock hit a high of Rs 1,218 and low of Rs 1,176.40 so far during the day. On BSE, so far 94,816 shares were traded in the counter.
Shares of ING Vysya Bank declined 1.81% to Rs 802. The stock hit a high of Rs 823.50 and low of Rs 789 so far during the day. On BSE, so far 1.01 lakh shares were traded in the counter.
Meanwhile, the S&P BSE Sensex was up 132.75 points or 0.47% at 28,467.38
Kotak Mahindra Bank and ING Vysya Bank declined in volatile trade today, 24 November 2014 on reports that the market regulator Securities & Exchange Board of India (Sebi) is probing whether there was any insider trading ahead of announcement of merger deal between the two private sector banks.
It may be recalled that the Board of Directors of Kotak Mahindra Bank (Kotak) and the Board of Directors of ING Vysya Bank (ING Vysya) at their respective meetings held on Thursday, 20 November 2014 had approved an all-stock amalgamation of ING Vysya Bank with Kotak Mahindra Bank. The announcement was made after market hours on Thursday, 20 November 2014.
However, prior to the announcement shares of Kotak Mahindra Bank had surged 7.28% to settle at Rs 1,157.05 on Thursday, 20 November 2014. The stock extended gains further by 3.68% to Rs 1,199.65 after scaling a record high of Rs 1,260.90 in intraday trade on Friday, 21 November 2014.
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Shares of ING Vysya Bank had surged 7.15% to settle at Rs 814.20 on Thursday, 20 November 2014 after scaling a record high of Rs 864.80 in intraday trade on Thursday, 20 November 2014. The stock extended gains further by 0.32% to settle at Rs 816.80 on Friday, 21 November 2014.
Reports on Thursday, 20 November 2014 had indicated that Kotak Mahindra Bank is in final stages to buy ING Vysya Bank in a deal valuing the latter at Rs 16500 crore. In clarification to merger deal reports, Kotak Mahindra Bank during market hours on Thursday, 20 November 2014 clarified that no decision has been made by the bank in relation to any merger or acquisition transaction. Seperately, ING Vysya Bank during market hours on Thursday, 20 November 2014 clarified that the bank is aware of disclosure obligations of the Listing Agreement and will abide by its obligations to make appropriate disclosures as and when such disclosures are necessitated by decisions taken by it.
As per press release issued after market hours on Thursday, 20 November 2014, upon obtaining all approvals, when the merger becomes effective, ING Vysya will merge with Kotak. ING Vysya shareholders will receive 725 shares in Kotak for 1,000 shares of ING Vysya. The proposed merger would result in issuance of approximately 15.2% of the equity share capital of the merged Kotak.
The combined Kotak will have 1,214 branches, with a wide-spread pan-India network, getting both breadth and depth given the strong geographic complementarity between Kotak and ING Vysya, the press release indicated. Substantial efficiencies will arise out of the proposed merger, which is likely to result in significant benefits for all stakeholders, be it shareholders, employees or customers, and ultimately the banking Industry, the press release further said.
ING Vysya Bank is a leading private sector bank with retail, private and wholesale banking platforms.
Kotak Mahindra Group is one of India's leading financial services conglomerates. The group offers a wide range of financial services that encompass every sphere of life. From commercial banking, to stock broking, mutual funds, life insurance and investment banking, the Group caters to the diverse financial needs of individuals and the corporate sector.
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