What ICICI has done successfully in the past, IDBI is set to repeat. Set to morph into a Universal Bank, IDBI will become India8217;s large...
Written by Monika Halan
3 min read
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What ICICI has done successfully in the past, IDBI is set to repeat. Set to morph into a Universal Bank, IDBI will become India8217;s largest bank after SBI and ICICI Bank, after IDBI Bank merges into it. As a depositor you will now be dealing with a larger entity and can hope for a greater slew of products and services. The bank plans to grow both in terms of reach and products. Better services, hopefully, will be part of the package. As a shareholder, you will have to wait before the exact ratio of the swap is being worked out. Early signals tell that the shareholder of IDBI Bank will get one share of IDBI for every 1.75 or two shares of IDBI Bank held. What are the plans of Chairman M. Damodaran? 8220;To give SBI a run for its money8221;! Banking promises to be full of action in the coming months.
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The market is supposed to be the best aggregator of information. Why is it then trading so heavily in the shares of a almost-dead entity 8211; Global Trust Bank? With the Oriental Bank of Commerce absorbing GTB, there is to be no swap of shares. Which means that as soon as the legal proceedings are complete, the GTB share is going to be worthless. Why then are crores of GTB shares being traded on both the Bombay and National Stock Exchanges? Sure, the shareholders want to get out and are selling, but if they are selling, somebody8217;s got to be buying. Especially, since the stock is in the trade-to-trade category meaning compulsory delivery on sales and purchase. The one logical reason that punters may have could be to book a short term loss to set it off against other short-term capital gains. The long term set-off is no longer valid since the long term capital gain is now zero, hence long term losses can no longer be set off against long term gains. Whatever the reason for the vultures to circle a carcass, you, the retail investor must keep off. The strategy is too risky to be worthwhile for you. Unless, of course, you like roller coaster rides!
