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MERGER OF Bank ofRajsthan And ICIC Bank
Group Members
VISHWANATH PATIL 33AJITPIYUSH
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Merger
The combining of two or morecompanies into a single companywhere
one company survives and
other loses their corporate existence.
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Type of Mergers
Horizontal Merger
Vertical Merger
Conglomerate Merger
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The BANK OF RAJATHAN Ltd.
Type Private (BSE),
Industry Banking
Loan Capital Markets and allied industries
Founded Udaipur, 1943
Products Loans, Savings, Investment
vehicles, etc.
Revenue 150,733.44 lakh (US$2,728.3 million)
Net income 117.7119 crore (US$21.31 million)Crore
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icici
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Why Bank of RajasthanMerger
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March, the Reserve Bank of Indiaappointed consulting firms to
conducta special audit of the books and
accounts of Bank of Rajasthan. RBIhad imposed a penalty of Rs 25
lakhon Bank of Rajasthan for various
violations. Totals of BoR For the nine-month
ended December09, the bank had net
loss of Rs 9 crore
Why Bank of RajasthanMerger
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Why Is RBI Allowing TheMerger
Hurdles To protest the Bank of Rajasthan'smanagement plan to
merge with the ICICIBank, more than 4200 employees of Bankof
Rajasthan
ICICI Bank found it economic as always toinvest in this deal on
a 100% stock swap
basis. ICICI Bank Ltd. has fixed the Record Date
for the purpose to determine entitlement of
shareholders of Bank of Rajasthan Ltd.
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Why Is RBI Allowing TheMerger
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Advantage for ICICI and BoR
ICICI Bank will gain marginally from themerger as Bank of
Rajasthan has areasonable penetration in its home state.The deal
will also help ICICI tackle
increasing ICICI bank added CASA deposits totaling
over 210 billion rupees in the year ended
March 2010 ICICI recorded a business per branch of
3 billion rupees compared with 47 millionrupees of BoR for
fiscal 2009
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This merger would substantially enhanceICICI Bank's branch
network (23 %increase apprx).
The acquisition will help ICICI increaseCASA (current and
savings account)flows, as also help in cross-sellingproducts
Strengthen ICICI banks presence in
northern and western India. ICICI hasnow moved to a branch-led
business
model
Advantage for ICICI and BoR
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The Big Deal The Deal
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The Big Deal The Deal
will give ICICI a sizeable presence inthe northwestern desert
state ofRajasthan, values the small bank at
about 2.9 times its book value In case of dissenting
shareholders of
ICICI Bank Ltd, they may be paid atthe rate of Rs.885.28 per
share
In case of dissenting shareholders ofBank of Rajasthan Ltd, they
may bepaid at the rate of Rs.154.50 per share
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The Big Deal The Deal
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Impact of the Deal
Deal The deal is very expensive Theproposed merger would
substantiallyenhance branch network and presence
in northern and western India for ICICIBank
ICICI After merger PE ratio22.9710/06/10EPS (Rs)36.10 Mar,
10Sales(Rs crore)5,826.98 Mar, 10Face Value(Rs)10 Net profit margin
(%)9.74 Mar,09Last dividend (%)120 26/04/10Return
on average equity7.58 Mar, 09
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