IDFC Shriram Group has announced merger to make a shift in the Indian Banking Sector. IDFC was granted the Banking License in 2015 and it is expected that the merger would carry the same. IDFC would have the lion share in the merger and may carry the name as well. However, the branding may be changed depending on the various stakeholder’s opinion. However, IDFC Shriram Group merger is not something that can be ignored. It is one of the huge shifts in the market and could be a game changer as well. Let’s see how this shape up in future would.

Read More

Permission

This is one of the major roadblocks for the merger. It needs the permission from the regulatory bodies like RBI, SEBI, and others. However, the chances do not look very bright here. According to experts, Shriram Group is a financial service group and the merger would be a Retail focused bank. The RBI does not really give permission to such merger as per the guidelines and if it gives now, RBI needs to amend the regulations or violate it. So, the merger is still under the cloud.

Asset

IDFC Shriram Group merger will pave way for a more than $9 trillion USD asset. The loan book of Shriram Group is almost 80,000 Crores whereas IDFC Bank has close to 60,000 Crores. IDFC is already the tenth largest private bank in India and the numbers may shake up very easily.




Market

The Stock market may experience huge changes due to the merger. It is expected that the stocks of Shriram and IDFC may grow; however, the market has shown no impact today. But the experts believe that the RBI permission is one of the major roadblocks for the market to react. If it gets the permission, then the movement can be huge.

Initiation

The new initiation of Finance group merges can change the industry altogether. If the merger gets a green signal from the authorities, many more similar merger can take place. There can be a total shift in the financial market in India and that can make the finance industry even stronger.