In July, infrastructure lender IDFC, which entered the banking space in 2015, and Piramal Group's financial services firm Shriram entered an agreement for a merger plan to create the largest retail-focussed bank in the country.
"This is to inform you that despite best efforts, IDFC Group and Shriram Group have not been able to reach common ground on a mutually acceptable swap ratio for the merger," IDFC Ltd said in a regulatory filing.
There was a period of 90-days to explore merger options between the two entities.
As per the plans, almost all key businesses of the Shriram Group were to merger with either IDFC Bank or IDFC.
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Analysts had already raised doubts on this plan saying it would not be easy to merge them given the Reserve Bank's reluctance to allow corporate entity entering into banking sector as well as its norms capping promoters' stake to under 10 per cent.
IDFC Ltd stock closed 2.68 per cent down at Rs 61.70, while that of Piramal Enterprises moved up 2.08 per cent to Rs 2,760 on BSE.
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