Shares of Bank of Baroda Climbed over 3%

Bank of Baroda shares surge 3% on merger deal, Vijaya Bank, Dena Bank stocks nosedive.
Shares of Bank of Baroda Climbed over 3%

Shares of Bank of Baroda climbed over 3 percent on Thursday after the public sector lender announced the swap ratio for the planned amalgamation of Vijaya Bank and Dena Bank. The investors also cheered the bank's plan to raise fund up to Rs 1,285 crore by issuing Basel III obedient bonds.

 Following the declaration, shares of Bank of Baroda gained as much as 3.30 percent to touch an intra-day high of Rs 123.35 apiece, after opening higher at Rs 121.80 compared to the previous close of 119.40 on the BSE. Holding early gains, shares were presently trading at Rs 120.90 apiece, up 1.26 percent.

 On the National Stock Exchange, stocks of the bank were trading at Rs 120.90, up 1.30 percent.

 Bucking the trend, shares of Dena Bank plunged as much as 20 percent to Rs 14.40 on the BSE among spray in volume trade. According to data obtainable with an exchange, as much as 21.31 lakh shares have distorted hand over the counter as compared to the two-week average of 2.94 lakh shares.

 In a similar trend, Vijaya Bank shares tumbled 7.4 percent in intra-day trade as investors gave thumbs down to share-swap ratio on its merger with Bank of Baroda.

 The Union Cabinet on Wednesday gave its agreement for the projected combination of Vijaya Bank and Dena Bank with Bank of Baroda.

 As per the scheme of amalgamation, shareholders of Vijaya Bank will get 402 equity shares of Rs 2 each of Bank of Baroda for every 1,000 shares held of Rs 10 each.

Similarly, Dena Bank's shareholders will get 110 shares of Rs 2 each of Bank of Baroda for every 1,000 shares held of Rs 10 each.

 In September last year, the government had announced the merger of Vijaya Bank and Dena Bank with Bank of Baroda to create the third-largest bank after State Bank of India and HDFC Bank. The government expects the new entity will be prepared from the beginning of the next financial year.

Meanwhile, the benchmark index BSE Sensex was trading lower by 242.29 points, or 0.68 percent, at 35,649.23.

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