Shares of and Vijaya Bank on Thursday tumbled up to 20 per cent after the Cabinet approved their amalgamation with Bank of Baroda.

Vijaya Bank tanked 6.76 per cent to end at Rs 47.60. Intra-day, it tumbled 8.12 per cent to Rs 46.90.

The scrip of Bank of Baroda closed unchanged at Rs 119.40.

"As per January 2 closing price and based on announced swap ratios, Vijaya Bank's 1,000 shares value stands at Rs 51,050 against which its shareholders have been awarded Bank of Baroda's shares worth Rs 47,939, translating into a loss of 6 per cent.

"Likewise, in case of Dena Bank, 1,000 shares of the bank, value stands at Rs 17,900, and on swap, they receive BoB's shares worth Rs 13,118, translating into a loss of 27 per cent," Elara Securities Research said in a report.

Paving the way for the first ever three-way merger of public sector lenders, the Cabinet Wednesday approved amalgamation of Dena Bank and Vijaya Bank with Bank of Baroda (BoB), a move that would create the country's third largest lender.

The boards of the three banks have also cleared the share-swap ratio for the proposed amalgamation.

As per the Scheme of Amalgamation announced by BoB, shareholders of Vijaya Bank would get 402 equity shares of BoB for every 1,000 shares held in the bank.

In case of Dena Bank, the shareholders would get 110 shares of BoB for every 1,000 shares owned in the bank.

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