Tuesday, June 15, 2021
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ING Vysya, L&T Finance in focus on merger buzz

ING Vysya Bank shares fell on high volumes on Tuesday after a media report claimed that L&T Finance Holdings has sought approval from the Reserve Bank to acquire the private lender.

In a statement to the Bombay Stock Exchange, L&T Finance Holdings termed the report as “speculative”, but added that the company keeps evaluating opportunities on both organic and inorganic basis.

L&T Finance Holdings, a non-banking financial company, was among the 24 applicants to apply for a banking licence. However, it lost to IDFC and Bandhan Financial Services when licences were granted earlier this year.

Global brokerage Maybank says if the deal goes through, it will help L&T Finance enter the banking business. However, the transaction is likely to happen at a premium to current market price, it added.

The brokerage says rumors about ING Vysya Bank’s takeover have emerged in the past as well, but pointed that the promoter (ING Group) has maintained its stake at nearly 43 per cent.

“The current market cap/branch for ING Vysya Bank is at Rs. 24 crore, which is attractive. HDFC Bank had acquired Centurion Bank of Punjab at Rs. 24 crore/branch in 2007,” the brokerage added.

Maybank has a “buy” on with ING Vysya Bank with a target price of Rs. 825.

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